Mumbai: Licenses for opening new banks would be issued under the norms and criteria laid down by the Reserve Bank of India.

"We have assured RBI that government borrowings will not affect access to private credit," Finance Minister Pranab Mukherjee said at a function organised by the RBI, adding that the process of consolidating government-run regional rural banks was underway.

The Finance Minister, in the budget for 2010-11 had announced that the RBI was open to giving banking licenses to private players and non-banking finance companies (NBFCs) if they met the central bank's criteria, reports IANS.

No new banks have been set up in the past eight years. In fact, no new Indian bank has been set up since the first flush of liberalisation when half-a-dozen banking licenses were given in 1993.

India has 96 scheduled commercial banks, 27 public sector banks, 31 private banks and 38 foreign banks, with a combined network of over 53,000 branches.

According to a government report, public sector banks hold over 75 percent of the total assets of the banking industry, while private and foreign banks hold 18.2 and 6.5 percent respectively.