Reserve Bank of India’s Internal Working Group (IWG) recommendations have been on several matters regarding banking license but the one on allowing the corporates to get into banking has predictably drawn the most attention. IWG feels that allowing corporates to promote banks can be an important source of capital in a capital-starved economy like India. However, there is a lot of criticism to this idea, prominent of them are the former RBI Governor and Deputy Governor.
Does this idea of giving banking license to corporate houses make sense given the Central Bank’s extremely cautious and conservative approach?
Give it a read to get an insight on the topic.