“A paper in this regard will be put out for comments by September 2016,” Mr Rajan said in the central bank’s bi-monthly monetary policy statement in which it cut its key interest rate by 25 basis points to a more than five-year low.
Asia’s third-biggest economy mostly depends on banks to fund its projects in the absence of a vibrant bond market. Slow-moving infrastructure projects however contributed to the banking sector’s mountain of bad and troubled loans.
The new differentiated-bank permits come after the RBI last year selected 21 companies to operate two categories of niche banks – payments banks and small finance banks – to improve financial inclusion in a country where many people lack access to formal banking services.
Some of the permit winners are expected to start operations later this year.
Mr Rajan also told a news conference that the RBI will release within weeks guidelines for licensing of full-service banks. Two new full-service banks started operations last year following India’s first bank licensing round in a decade.