New banking License and Financial Inclusion.
The banking system in India has been constantly evolving with the government and the Reserve Bank of India (the RBI) making changes in the banking policies, as and when required. The RBI grants licenses to entities proposing to establish new banks and enter the industry, and also governs terms of the same.

For nearly two decades, during 1970s – 1990s, no banks were allowed to be set up in the private sector. In 1993, consequent to liberalization of economy, the guidelines for licensing of new banks in the private sector were formulated for the very first time (1993 Guidelines) and the same were revised in 2001 (2001 Guidelines).

The RBI has issued the revised guidelines for licensing of new banks in the private sector on 22 February 2013 (2013 Guidelines). Applications for grant of licenses under the 2013 Guidelines have to be submitted with the RBI by 1st July 2013, and once the license is granted, the banks have to be set up within one year of receipt of the in-principle approval.
Under the 1993 Guidelines individuals, corporate groups and financial institutions were eligible to set up banks. This position was amended by the 2001 Guidelines so as to enable individuals and financial institutions to set up banks, large industrial houses being made ineligible to promote new banks. However, individual companies connected with large industrial houses could participate in the equity of a new private sector bank up to a maximum of 10%. The 2013 Guidelines have thrown the field open to all types of private entities and corporate groups (owned and controlled by residents), entities in the public sector and existing Non-Banking Financial Companies to apply for banking licenses. The RBI has also introduced the "fit and proper" criterion which provides that the promoter should have a past record of sound credentials, be