The Reserve Bank of India is expected to finalize the guidelines for issuing differentiated banking licences within the next four months. The idea then is to issue such licenses on tap, says financial services secretary Gurdial Singh Sandhu. He said: ““We are looking for differentiated banking licences such as payment banks, wholesale banks and retail banks. Government would like this to happen as soon as possible.” Wholesale banks will deal with larger institutions; retail banks will focus on individuals or smaller businesses; payment banks will help widen the spread of payment services and deposit products to small businesses and low-income households. RHI had suggested that issuing licences to new banks should be a continuous rather than an intermittent process to make the sector more competitive. A gradual increase in the number of banks will also not strain the existing banking system in terms of business and human resources, which could be the case when permits are issued in bulk. The new licences are being issued to widen the reach of the Rs 84 trillion banking industry as only 35% of adults have access to formal banking services as of now. Sandhu also said that public sector banks will be asked to explore selling non-core assets and raise funds through capital markets.