InvestorQ : Why is the Congress party objecting to the proposed permission to corporate groups into banking?
diksha shah made post

Why is the Congress party objecting to the proposed permission to corporate groups into banking?

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6 months ago
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The justification offered by the Congress and the Left appears to be quite feeble and hard to accept. It does look like they are living with false ghosts. Banks are well regulated and it is very unlikely that any corporate can exert undue influence.

A day after the Internal Working Group of the RBI made its proposal on giving banking licenses to large corporate houses, the Congress and the left are literally out on the streets vehemently protesting against the proposal.

For example, the left parties have even warned that such a move would allow for a huge conflict of interest as dividing lines between lenders and the borrowers would almost become too thin and subsequently ambiguous. It ignores the improved regulation of banks.

In fact, the move is more to pave the way for mega financial services businesses affiliated to large business groups like Birla, Bajaj and M&M to be subjected to more stringent regulation and reporting. They have been operating like banks without the accountability of banks and that needs to change.

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