Friday, March 5, 2021
Sarbat Sehat 40 5

Markfed Sohna New

Verka Ice Cream

Innocent Hearts INNOKIDS Banner

Bank licences to corporates a ‘bad idea: Raghuram Rajan

- Advertisement -

New Delhi, Nov 23, 2020-
Days after an Internal Working Group (IWG) of Reserve Bank of India’s (RBI) recommended allowing large Indian corporates to enter the banking sector, former RBI Governor Raghuram Rajan and Deputy Governor Viral Acharya have hit back at the suggestion and questioned the timing for it.

Terming the recommendation as a “bombshell”, in a blogpost, they said that although several recommendations of the report are worth adopting the one to allow corporate houses into banking should not be taken up.

“To the contrary, it is even more important today to stick to the tried and tested limits on corporate involvement in banking,” said the article.

Sharing the article on LinkedIn, Rajan said that he thinks the proposal as a “bad idea”.

It said that there are two primary rationales for not allowing corporates into banking, first being that industrial houses can easily get financing, with no questions asked, in case they have an in-house bank.

“The history of such connected lending is invariably disastrous – how can the bank make good loans when it is owned by the borrower?”

Further, both the economists also noted that regulatory can succumbed to either political pressure or the urgency of the moment.

Observing that a regulator has to discriminate between “fit and proper businesses” and shady ones only when it is “truly independent” which may always not be the case.

“Why is there urgency to change the regulation? After all, committees are rarely set up out of the blue,” said the article.

Questioning the timing of the proposal, Rajan and Acharya said: “Why now, at a time when we are still trying to learn the lessons from failures like IL&FS and Yes Bank?”

The proposal has created ripples and drawn criticsm from several experts and analysts although industry has applauded the recommendation. (Agency)

- Advertisement -

Yes Punjab - TOP STORIES

Punjab News

Sikh News

Transfers, Postings, Promotions

- Advertisement -Bibi Jagir Kaur Guru Gobind Singh Prakash Purab Banner

Stay Connected

20,439FansLike
112,826FollowersFollow

ENTERTAINMENT

Shreya Ghoshal announces pregnancy

Mumbai, March 4, 2021- Singer Shreya Ghoshal took to Instagram on Thursday to share the news of her pregnancy with fans. The singer posted a...

Sonu Sood to launch blood bank app

Mumbai, March 3, 2021- Actor Sonu Sood is going to launch what is expected to be India's biggest blood bank, through an app named Sonu...

Bigg Boss 14 - The Latest

National

GLOBAL

OPINION

Bill Gates

Target Net Zero by 2050 – By Asad Mirza

In his new book on climate change and its adverse impact in the future, Bill Gates urges everyone to remember two things: Net Zero...
Farmers Protest againt Farm Laws in Delhi

All India Kisan Agitation against 3 Farm Laws & the deadlock – by KS Chawla

Almost three months have passed since the 41 kisan unions of the country have launched agitation against the three farm laws passed by the...
amarinder jakhar

Congress captures Urban Bodies in Punjab leaving others far behind – by KS Chawla

The Congress Government led by Amarinder Singh has captured the Local Bodies in the elections to the eight Municipal Corporations and 109 Municipal Councils...

SPORTS

Health & Fitness

Edible Oil

Clinical studies find mustard oil may be best for your heart: Experts

New Delhi, March 4, 2021- If you want to achieve good health amid the pandemic, choosing the right oil should be the foremost step as Covid-19 is an inflammatory disease and we should, therefore, focus more on anti-inflammatory diets and the right cooking oil, top health experts have said. Eminent physician and cardiologist and Past President of the Indian Medical Association...

Gadgets & Tech

error: Content is protected !!