A Case for Corporate Ownership of Banks
The question of permitting Non-Financial Corporates (NFCs) into banking is well debated. While the jury is still out, the bias is clearly towards ‘NFC ownership of Banks is bad’. However the existing template of bank licensing that excludes NFCs’, is not without loopholes either. The moot points, therefore, are – does NFC ownership significantly increase the existing risks? and, can the risks be mitigated? In this article, we probe these questions, making a case for having NFC owned banks
RBI IWG Report: Assumptions As Tenuous As Recommendations?
The recent report by Internal Working Group (IWG) of RBI has made recommendations that run contrary to the practice followed in internationally, especially the recommendation to would allow industrial groups to own banks. Predictably, the report has been controversial. However, lost in the noise is a set of implicit assumptions that the IWG seems to have made, that further weaken its contentions. Nishikant Das assesses these assumptions.