"It will not only help in expanding banking services but would also bring in healthy competition," Assocham president, Rajkumar Dhoot, said.
Also, the provisions regarding permitting existing non-banking financial companies (NBFCs) to convert into banks will also meet the demand of NBFCs sector, he added.
The Reserve Bank today released the final guidelines for issuing of new banking licences, allowing entities in the private and the public sector as well as non-banking financial companies to enter the fray.
Assocham said the corporate governance requiring at least 50 per cent of directors of the non-operative financial holding company (NOFHC) is also a major step which will create more transparency and infuse adequate oversight on the functioning of the new banks.
The RBI, which allowed private banks in 1993, had issued the last set of licences in 2001 to two entities-Kotak Mahindra Bank and Yes Bank.