New Delhi, July 2: With 26 public and private sector companies applying for bank licences, Finance Minister P Chidambaram has said that there was no ceiling on the number of entities which can be permitted to operate a bank.

“I don’t think there is a ceiling. I don’t think there is a number in mind. It all depends upon how many applicants are eligible applicants. The fact that somebody applies doesn’t mean he is an eligible applicant,” he said in an interview.

“If there are very few eligible applicants, then the number of banks that will get licences will also be few. I don’t think that the Governor has any ceiling in mind,” he said.

On whether India needs large banks or large number of banks, the Finance Minister said there is a case for both.

“A large number of banks will mean more competition, a quicker reaching into the country and faster financial inclusion. Large banks will mean that we are able to finance large projects using our own bank resources rather than depending upon foreign bank resources. So, both are required in this country,” he said.

Yesterday, RBI announced that 26 entities, including Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital, L&T Finance and Bajaj Finserv, applied for grant of bank licences.