In a major move, EC has allowed the Reserve Bank of India, RBI, to issue licences for setting up new banks.

In a letter to RBI Governor Raghuram Rajan, the Commission yesterday gave its nod to the central bank for granting in-principle approval for banking licences. The approval came after RBI missed the March-end deadline for issuing the first bank licence in almost a decade.

The RBI had approached the Election Commission on March 12, seeking its approval for granting bank lincences as the model code of conduct had come in place after the announcement of general elections.