In order to consolidate the law relating to the NBFCs, regulation is being framed to cover detailed norms with regard to entry point and the regulatory and supervisory issues. Competition Steps have also been initiated to infuse competition into the financial system. The RBI issued guidelines in 1993 is respect of establishment of new banks in the private sector.
Likewise, foreign banks have been given more liberal entry. Recently, the norms for entry of new private banks were rationalised. Two new private sector banks have been given ‘in-principle’ approval under these revised guidelines.