How deep is the malaise? How long can we avert systemic collapses through bailouts? Has RBI gifted Lakshmi Vilas Bank to DBS? How different in nature are the failures of Yes Bank and the 94-year-old bank?
Corporate entry into banking will increase importance of money power in politics and make us more likely to succumb to authoritarian cronyism, former RBI Guv said in a paper co-written with Viral Acharya.
Here we present key recommendations of RBI panel and list out their implications for banking sector with respect to entry of corporate houses, NBFCs and other issues.
RBI panel proposes to allow large corporate houses to own banks in India. Will we see Bank of India, UCO Bank, Central Bank and Indian Overseas Bank privatised?
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NBFCs promoted by large corporate houses like Tata Finance, Aditya Birla Capital, Bajaj Finance, L&T Finance, Mahindra Finance and Aditya Birla Capital may now look forward to becoming universal banks.
RBI's internal working group has suggested hiking the cap on promoter holding to 26% from the current 15% for all private banks.
RBI's internal working group has recommended that payments banks can convert to a small finance bank if they have run operations for 3 years.
In Karur, which is the registered headquarters of Lakshmi Vilas Bank, the staff received police protection after depositors went unruly following moratorium imposed by RBI.
Employees of Lakshmi Vilas Bank want RBI to amalgamate the sick bank with an Indian PSU. They also fear DBS may shut down many branches of LVB.
