The process of granting banking licenses to private companies and NBFCs seems to be a crucial task for the RBI. Who should get a bank license and who not is definitely not an easy decision to make.

Regarding this issue, the Reserve Bank of India has decided that it will work with all its stakeholders and also study introspect globally into the matter while formulating guidelines for new bank licenses especially to private companies, Deputy Governor Usha Thorat said.

"The process is on to finalize guidelines for new banking licenses. RBI will need to indulge in dialogue with all players concerned. We will also study international experiences, especially in case of applications by corporate houses or industrial houses," she quoted.

The main motive behind this step has been to broaden the financial literacy base in the country and spread banking to almost all unbanked areas of the nation.

Official estimates suggest that a mere 30, 000 of the total 6, 00,000 habitations in the country are exposed to banking services.

Keeping this note in mind, the RBI had earlier hinted that the new banks would cater to the needs of rural India only.

"We will try to ensure the adherence to best practices, that are important for the country, so that we come up with guidelines that will boost penetration of banking services in the country," Thorat said.

Financial inclusion is the need of the hour-the country feels. The Finance Minister, Mr. Pranab Mukherjee in the Union Budget 2010-11 had proposed the idea of issuing bank licenses to more entities so as to spread banking awareness in the country.

RBI has already moved a step forward towards financial inclusion by setting up ATMs and spreading banking literacy in rural and remote areas of India.

Thorat has also said that the RBI will keep existing principles on ownership and governance in mind while drafting guidelines for new banking licenses.