MUMBAI, Feb 23, (AFP): India on Friday unveiled rules for issuing new bank licences in a push to expand financial services into the country’s rural hinterland where hundreds of thousands of villages have no banking outlets. Ninety percent of India’s 600,000 villages do not have banking facilities, the Reserve Bank of India says, while fewer than half of the country’s 1.2 billion people have a bank account. Private companies, public-sector groups and non-banking financial firms will be eligible to apply for licences for new banks by setting up financial holding companies, the central bank said in a statement. Groups seeking to set up a bank “should have a past record of sound credentials and integrity, be financially sound with a successful track record of 10 years”, the Reserve Bank said. The minimum capital needed to set up a bank will five billion rupees ($91 million).

Also, the new banks will have to open at least a quarter of their branches in rural areas with no such facilities, and foreign shareholdings in any new bank should not exceed 49 percent in the first five years. The need to set up more banks, especially in rural areas, has become increasingly urgent as the government seeks to pay cash directly to India’s poor to ensure more efficient distribution. Indian conglomerates like the Tata Group and the Anil Ambani Reliance group, which already own financial businesses, have voiced interest in setting up banks. The Reserve Bank is seeking to follow a path of “financial inclusion”, embracing swathes of rural India which have little access to banking services, the bank’s governor Duvvuri Subbarao said. No new Indian bank has been set up since the private Yes Bank in 2004. Yes Bank now is a leading industry player.

India currently has just 26 state-run, 20 private and 40 foreign banks. Another 2,200 rural and co-operative banks cover other parts of the country. The Finance Ministry said it hopes the Reserve Bank will be able to start issuing licences for new banks by the end of the next financial year, which runs to March 2014. “With all going well, with all clearances, by end of the (next) financial year we will see some success,” Financial Services Secretary Rajiv Takru told reporters in New Delhi.

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NEW DELHI: Indian software tycoon Azim Premji said Saturday he has given $2.3 billion to an education charity that he controls, reportedly the biggest charitable donation in the country’s recent history. It is his second recent big donation after giving almost $2 billion to the charity in 2010, and came shortly after he joined the Giving Pledge club set up by Microsoft co-founder Bill Gates and billionaire investor Warren Buffet. In Saturday’s donation, the chairman of software firm Wipro transferred shares worth $2.3 billion from the company to a trust which controls the education charity Azim Premji Foundation, a company statement said. The billionaire, who inherited a cooking oil company and transformed it into India’s third-biggest outsourcing services firm, said the trust will use the funds to scale up the foundation’s activities “significantly”.

The charity seeks to boost the quality of India’s overstretched education system by improving teacher quality and setting up model schools. The Business Standard newspaper and other media reported it was the biggest one-off donation to charity in India in modern times. The media-shy tycoon is India’s third wealthiest individual with a net worth of some $16 billion, according to a 2012 Forbes rich list. Premji, whose trust funds initiatives including rural education and teacher training, has long promoted education as a way to tackle India’s deep poverty. He told a recent World Economic Forum in Davos that “education is perhaps the most powerful enabler of human life and equity”.

A few days ago, he became the first Indian to join the Giving Pledge club, which encourages the world’s wealthiest to donate at least half their fortunes to charity. Those who are “privileged to have wealth should contribute significantly to try and create a better world for the millions who are far less privileged,” Premji said when joining the club. The billionaire’s donation comes amid growing disquiet in India about the yawning divide between the country’s burgeoning wealthy class and the hundreds of millions still living in deep poverty. A 2012 report on philanthropy by global consultancy Bain noted a “striking imbalance” in India, noting it was home to one of the world’s fastest-growing wealthy populations but also one in three of the world’s malnourished children. While the report noted that philanthropy was on the rise, it added there was “significant room for improvement if India is benchmarked against the US, one of the world’s leaders in private giving”. With Premji’s latest donation, his educational charitable trust’s shareholding in Wipro will go up to nearly 20 percent.