Saturday, January 23, 2021

‘RBI to decide on bank licences to corporates after due examination’

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Ministry to form oversight mechanism for NBFC asset buy schemeMumbai, Dec 4 (IANS) At a time when the proposal of giving bank licences to corporate houses has received criticism from several quarters, the Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the central bank has not decided on the issue yet and will take a “considered” decision after going through all the comments on it and examining the whole matter.

In a virtual press conference after the monetary policy meet, Das said that is only a proposal of an internal working group of the RBI and is not the view of the central bank.

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“Let me say it very clearly that it is a report by an internal working group of RBI. It should not be seen as RBI’s point of view and decision. I think that has to be very clearly understood,” he said.

The Governor said that the panel acted independently and had their independent deliberations.

“They have given a certain point of view. RBI has not taken any decisions on these issues so far”

Noting that the RBI’s approach is “consultative”, Das said: “The report of the internal working group is now in the public domain. We will receive comments. We will examine the whole matter and take a considered decision.”

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Earlier this month an Internal Working Group (IWG) of the RBI recommended allowing large Indian corporate houses to enter the banking sector, following which questions were raise on the timing of the suggestion and several economists and experts said that the proposal may be detrimental to the Indian banking sector.

Former RBI Governor Raghuram Rajan described the proposal as a “bad idea and termed the recommendation as a “bombshell”.

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