The much awaited draft guidelines for issuing new bank licenses was released by regulator Reserve Bank of India on Monday. Corporate houses which have been eyeing an entry route into the highly regulated banking segment since long have a light of hope now.

The draft guidelines have said clearly that finance companies can get entry into banking sector and promoter groups having "sound credentials and integrity" along with a record of a successful business for 10 years can open banks.

The new banks are required to have a paid up capital of Rs 500 crore. 25% of their total branches should be aimed at rural areas. The bank should get listed in 2 years time and that it should be held by a separate holding company. The holding company will not be allowed to borrow money to start the bank.

Although most conditions seem to be easily achievable by corporate houses, RBI has said that licenses will be released very selectively.

"...it may not be possible to issue licences to all the applicants meeting the eligibility criteria...," said the draft note.