The Finance Ministry has sent its views to the RBI on granting new banking licences on August 12. It is believed to be in favour of granting new banking licences to industrial houses, provided the bank is a completely separate entity. In the communication, the Ministry has apparently suggested to RBI to soften its stand on FDI. The RBI in its discussion paper had suggested below 50 per cent aggregate non-resident investment. According to sources, the Ministry would prefer the promoters’ contribution to be initially at least 40 per cent, which can be brought down after seven years. The RBI had suggested something similar, except with a five-year lock-in period, and another five years before dilution of stake
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