Explained | Risks of allowing large industrial groups to set up banks
The Hindu
RBI has decided against issuing banking licences to industrial groups despite suggestion by internal panel
The Reserve Bank of India (RBI) late last month decided to keep on hold the implementation of a recommendation made by an internal working group to issue banking licences to large industrial groups. Many view the RBI’s decision as a prudent step to preserve financial stability.
An internal working group of the RBI headed by P.K. Mohanty in November last year . The group’s recommendation was seen by analysts as an effort to bring more and help increase lending. The proposal was met , including former RBI governor .
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