Building a brave new world of banking

The differentiated banking model, therefore, has been far from convincing and may take more time to stabilise

The recent press release by the Reserve Bank of India on its acceptance of 21 of the recommendations made by the internal working group, with minor modifications, is a welcome step towards the extant ownership guidelines and corporate structure for Indian private sector banks. The much-awaited decision on the conversion of non-banking financial companies or NBFCs into universal banks and allowing large corporate/ industrial houses to run banks may soon be addressed by the regulator as well.

Of course, for admitting large corporates/industrial houses, the Banking Regulation Act, 1949 needs amendments, and will have to go through the parliamentary process. In