The Reserve Bank of India (RBI) extended the deadline for meeting its norms for financial institutions seeking banking licences from 12 months to 18. This has given a longer life to the in-principle approval given to these institutions. Earlier, the guidelines said that the approval will expire in 12 months.

“It is expected that this would provide sufficient time for the promoters/promoter group to comply with the various stipulations in the guidelines and the terms and conditions that would be set out while granting the in-principle approvals to successful applicants,” said a 165-page RBI press released on Monday.

An RBI committee will be taking up the awarding of fresh banking licences in an internal scrutiny meeting which is scheduled to be held by Sepetember-October, Rajiv Takru, the financial services secretary, told a business news channel on Tuesday.

Pushing for greater financial inclusion, the RBI had issued guidelines on February 22, on the setting up of branches of banks in unbanked areas.

The RBI offered in a clarification that the move has been taken so that the aspiring banks have  “…more time for a smooth transition from the existing structures to that prescribed in the guidelines as also for meeting the regulatory requirements.”

However, the July 1 deadline for applying for new banking licences remains. The apex bank also shed light on some of the norms which cause it to overlap with other sectoral regulators like SEBI and IRDA. “It has been decided that while the structure prescribed in the guidelines is the preferred structure, the intending applicants should approach the other financial sector regulators for bringing the entities regulated by them under the Non-operative Financial Holding Company (NOFHC). Their decision in this regard would prevail. Therefore, at the minimum, the proposed bank and all RBI regulated entities will necessarily be under the NOFHC,” the bank has said.

RBI said that has it received 443 queries from 34 individuals and organisations.

It stands with its condition of ensuring banking in rural areas which has been a major grouse of many corporate houses seeking the banking licence. “Banks need to have 25 percent of the branches in unbanked rural centres with population up to 9,999,” the bank had said in an earlier statement.

The bank gave no relaxation on maintain the mandatory credit reserve rate and the statutory liquid ratio, though.