The Reserve Bank of India (RBI) has issued ‘in-principle’ approvals to infrastructure lender IDFC and micro finance institution Bandhan Financial Services to start new banks in the country.

The two entities will be the latest to join the private sector bank club and have been given 18 months to meet the conditions set by the central bank to start operations.

As per the latest report on banking trends in India, RBI reported that there were 89 commercial banks, excluding regional rural banks, operating in India at the end of the financial year 2012-13 that employed 1.09 million people.

The central bank also said that these 89 commercial banks accounted for 331 million debit cards, 20 million credit cards and 114,014 automated teller machines (ATMs) across the country.

According to an analysis in Mint, RBI first issued licences to a new set of private banks in 1993. Nine new banks were set up and one co-operative bank was allowed to convert itself into a commercial bank. The list included Global Trust Bank, ICICI Bank, HDFC Bank, UTI Bank (renamed Axis Bank), Bank of Punjab, IndusInd Bank, Centurion Bank, IDBI Bank, Times Bank and Development Credit Bank.

Of these, Times Bank merged with HDFC Bank. Global Trust Bank was forced to merge with Oriental Bank of Commerce, and Bank of Punjab was acquired by Centurion Bank to form Centurion Bank of Punjab, which, in turn, was taken over by HDFC Bank.

Two licences were issued later including conversion of a non-banking financial company into a bank – Kotak Mahindra and Yes Bank.