The Big Picture : Banking Sector Overhaul

A working group at the RBI has recommended a series of changes that could transform the country’s banking landscape by paving the way for large industrial conglomerates to set up banks. The proposals could also allow large non-banking finance companies and niche payment banks to convert into lenders. In a report made public on Friday, the committee recommended that banking regulations be amended to allow large industrial houses to act as so-called bank promoters, meaning they could take a significant stake in a lender, something the central bank has strongly resisted in the past. As well as opening up the banking sector, the committee suggested adjusting the size of the stakes major shareholders can hold in a lender. For investors not involved with the bank at the outset, or non-promoter shareholders, a uniform cap of 15% instead of a current tiered structure was suggested by the committee, which was formed in June to review ownership guidelines and the corporate structure of Indian private sector banks. It recommended increasing the size of the stake that promoters in private banks can hold to 26% from the current 15% over a 15-year time frame. In this edition of the big picture we will analyse the recommendations of the RBI.
Anchor:- Frank Rausan Pereira
Producer:- Sagheer Ahmad
Guest Name:-
1- Sidhartha, National Economic Editor, TOI
2- Ajay Shankar, Former Secretary, DIPP, Ministry of Commerce & Industry, GOI
3- Dr. P. Pullarao, Economist

[@grapeshott]

Why no one in the panel who opposes the recommendations? Now-a-days I have noticed the debates don't look at the other side of what the government says

[@harikumar3038]

frank was a student shankar ias academy, chennai ....... good discussion

[@sameer6076]

Really

[@somanathpujari6096]

For NPAs, we can put in a body like bad bank or asset reconstruction company(ARC) to buy the NPAs from the banks. These NPAs can be sold by auction to private players and provide them incentive and subsidies for the NPAs to grow and this will also help to recover the NPAs and will also get good good profit by auctioning

[@harika7798]

Questions were brilliant but answers by panelists were bland. Mr Siddharth is an exception.

[@jitendrathakur8089]

its pleasure to listen frank and other panelists...nice discussion..thanks rstv

[@akankshapandey9732]

Thank you Sir🌞

[@pratiush1000]

Pereira, I thought you would ask one key question regarding the 'risk' of having corporates entering into the banking sector, but you didn't. The question is 'How RBI could tackle the potential conflict of interest of a corporate associated with it?' As in, generally, these big corporates are the ones who default and create large NPAs, now if they will be allowed to open banks, depositors like you and me will put in our money in these banks. Wouldn't they start borrowing from their own banks? How can a borrower be allowed to open a bank? I am sure, RBI must have thought about it and could have put some checks on this risk. But, that doesn't come out clearly from your show.

[@sahabg5807]

The big corporations are anyhow getting any sum of money as they wish. Will the heavens fall if the corporates enter the banking system. They still are into the NBFCs. Look at the condition of the public sector banks in India. We need to come out of our comfort zone .

[@pratiush1000]

@@sahabg5807 I think a better solution to the Public Sector banking could be to allow higher FDI in public sector banks. There won't be a conflict of interest, banks will get a better governing board, will be able to free PS banks from lending under the pressure of politicians and bureaucrats. You could see the benefit of Foreign capital in the way Laxmi Vilas Bank got saved by a Singapore based DBS bank. On your argument, NBFCs are not allowed to.get deposits. Plus, as per the current norms, none of the NBFCs have primary businesses beyond financial services. Thus, the risk is less. On contrary, retail banks have far more greater amount of deposits. Plus, I haven't said that it should not be done. I have just raised a question, how would RBI tackle this risk? The episode, however, don't even acknowledge that such a risk exist.

[@sahabg5807]

@@pratiush1000 u r right brother.

[@ShivShankar-tm6xc]

indian economy needs Reform and regulations which gives us new direction to our economy to meet future challenges after post covid era. rbi should be more liberal so formation of policy move ahead in better way to run banking sector. we have to appreciated our banking farm which servived in covid era while having gobal gobal crisis. i think we need insurance policy for huge amount deposit in bank, so it will encourage our customer to deposit his money in our domestic bank and it will also help to tackle npa problem. finally if we want to be 5 trillion economy we need reform to strengthen our banking system.

[@sapnewapne]

Nice summary 👍

[@gitacharak7167]

Tyyy RSTV Nd Frank sir🙏🙏🙏Nice Discussion👍👍👍

[@satyamevjayathey3723]

all those portfolios which cannot be handled will be divested or privatised. it us nothing but passing the buck. banks are merged creating work pressure, petrol companies are getting privatised, air india and bhel are not profit making. what does this mean. all independent bodies are not independent. the govt wants Malai at some one else cost.

[@narmadaskinclinic6750]

Very good,many rich companies are sitting idle so govt descision is goog to generate tax by increasing tax payers,new services new tax generated 👍

[@bikramkumar3923]

Thanks RSTV

[@prashantdagale9542]

What is the difference between a Private bank & the corporate owned bank here talked about?

[@satyamevjayathey3723]

how much money is recovered from Vijay malya, pnb fraudester, and other looters of public money.

[@harikumar3038]

how can borrowers be bankers?

[@suhagrastogi551]

Thanks Rstv

[@ms-fb6xt]

Pura ghuma fira k kaam kar raha hai...india mein to bank ki kami nahin...to aur keu naya bank chahiye??? Exisiting bank hi to sahi se business kar nahi pa raha ...npa is huge concern....ab koi loan nahi lena chahta...to liquidity ka bhi to probo m nahin...unbanked area ko coverage dene ka koi baat nahi kar raha hai...big corporate ko bulake kaya faida hoga? 1969 k pahele kaya laut jana chahte hai??? If big corporate has so much money to run banks why aren't they pay back to curb their npa???

[@satyajitchattopadhyayyt]

Have you listened the discussion carefully?

[@ms-fb6xt]

@@satyajitchattopadhyayyt not necessarily required...read raghuram rajan's comment on this issue in his linked in profile....basically morning shows a day...i have listened first ten minutes and got idea of what is being said...been following rstv for past two years ...panelist most of the time are pro govt... anyway ...did u see any retired govt high ranked staff commenting against govt decision in rstv? I remember last yr when there was a discussion going on about india's joining in RCEP ..all panelist said yes tremendous opportunity india shd join...but what actually came out later is known to all .... Given the scenario at present it will be a monumental blunder whose effect could only be felt after 3/4 years...gst has not worked well which has been understood only after pandemic came..what if states revenues do not grow 14%....kuch kuch economic decision sahi nahi ho raha hai...proof? ?? See gdp for past 4 years(leave pandemic alone..it shd not be considered) India needs demand generation by job creation for now..there is enough supply of liquidity Making everything as per corporate wish will devastate the secotrs...example telecom... earlier ppl have choices...now u can only choose among 3 jio/airtel/voda...now nobody wants to renew 2g and purchase 5g !!!!

[@ajitkumardede5920]

@@ms-fb6xt well said

[@khanu1731]

Good evening to all Nice debt on blanking sector

[@shubhamsingh98111]

Nice and thanks to rstv

[@ajeetgupta3781]

Thanks Frank sir

[@someshshukla1422]

Thanks

[@paruh1921]

Tq u sir

[@nalinikantsbi6350]

Everything is being done for adani ambani not tata bidla

[@satyajitchattopadhyayyt]

I think you have less knowledge on this. Research again.

[@suzimanipur2983]

☺🙏

[@satyamevjayathey3723]

privatisation or dis investment will not lead to 5 trillion dollar economy.

[@deepakrathore9175]

Accha bhai aap jyada economy jnte ho rbi se😂😂😂

[@pkggallery4586]

Modi is acting like slowly this country will be under these big house raj from Nehru raj and British raj, we Indian should understand that, supporting Modi n BJP on all issues is not nationalism, I'm a core BJP wala, I'm engaged with RSS, I'm big supporter of Modi but I'm not a blind bhakta, nationalism means working for good for the Nation not about supporting anyone on beheast of nationalism, now understand why nationalism it's because we need country, so now who need country does these big house need country answer is no they don't need they can move to any country for their business and the govt of that country will support them for their business, so who need, we ordinery people need coutry and we should do nationalism but for India n Indian not for these big houses, it must be a give and take game for govt appointed by people of this nation, be it any business houses but the way Modi is doing it's very much against the purpose so we India should raise our voice since the country is of ours not of these big house.

[@manishchaurasia2954]

Thanks