The Competition Commission has asked the Reserve Bank to 'unshackle' commercial banks by allowing them operational freedom in functions like branch expansion and opening of new ATMs.The sole Member of the Competition Commission of India (CCI) Vinod Dhall recently made a presentation to the top brass of the central bank in Mumbai expressing concern over the lack of operational freedom for the banks that is stiffling competition among them.Drawing a comparison with the insurance sector, which has seen an impressive growth with around 25 new players in short span of time, the CCI said because of excessive regulation only two new banks could open in the last 10 years.As per the existing norms the banks are required to seek RBI's permission for every small operational matter not to speak of opening new branches, their location and size."Banks are required to seek permission even on matters like whether the ATM would be located on the ground floor or the first floor of a building," CCI said in its presentation.A number of parameters like interest rates on the saving accounts are still regulated by the RBI leaving little scope for competition.The CCI also raised the issue of "forcing" mergers on the banks without determining the impact on free competition.
