No bank licence to India Inc: RBI sees threat to financial stability

The Reserve Bank of India (RBI) has stuck to its traditional stand of restricting large corporates from promoting banks.

In informal discussions with the government in the context of the new privatisation policy that is in the planning stage, the RBI has communicated its stand on the matter, sources familiar with the developments said.

The NITI Aayog had recently recommended to the government that long-term private capital should be allowed into the banking sector. It also suggested giving banking licences to select industrial houses with the caveat that they didn’t lend to group firms. 
 

The regulator’s main concern is that