RBI Report Suggests Industrial Houses to Be Allowed to Own Banks

Reserve Bank of India’s (RBI) internal working group released a report on Friday. Some of the key findings of the report suggested that large corporate and industrial houses be allowed to own banks by amending the Banking Regulation Act, 1949.

It has also proposed that NBFCs with an asset size of more than Rs 50,000 crores could be allowed to convert into banks if they have completed 10 years of operation.

However, former RBI governor Raghuram Rajan and former deputy governor Viral Acharya released a joint statement criticizing the report. They had reservations about industrial houses owning banks and the ease with which loans could be misused.

“The history of such connected lending is invariably disastrous – how can the bank make good loans when it is owned by the borrower?”, they said in their joint statement.

The future of this country, economy wise atleast, is not good.