The Reserve Bank of India will consider granting licence to new private banks from January 2005, subject to various criteria like minimum capital of Rs 200 crore (Rs 2 billion).

"RBI had issued in-principle approval to two applicants in January 2002 and will consider fresh applications for new banks only after three years from that date," Minister of State for Finance Anandrao V Adsul informed the Lok Sabha on Friday.

The guideline issued by RBI for entry of private banks require an initial minimum capital of Rs 200 crore and minimum capital adequacy ratio of 10 per cent on a continuous basis.

Licences would be issued by RBI to those banks that are likely to conform to the best standards and customer service and efficiency.

The number of licences issued would be restricted to 2-3 of the best acceptable proposals.

There are 28 private sector banks operating in the country.