Congress opposes move to allow corporate houses set up banks

The Congress on Tuesday strongly opposed a proposed move of Reserve Bank of India (RBI) to allow corporate houses to enter the banking sector and set up banks. Its senior chief and former Union Finance Minister P. Chidamabaram stated it might “reverse” the good points made previously 50 years.

At a digital press convention, Mr. Chidamabaram and occasion common secretary Randeep Surjewala accused the Union authorities of “pushing” its agenda via RBI, and appealed to different political events and commerce unions to be part of the Congress in opposing the move.

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The occasion requested the federal government to “unequivocally” declare that it had no intention to pursue the proposal.

Mr. Chidambaram stated everybody knew which “politically connected corporate houses will get the first licence” if the proposal goes via.

“The proposal, ostensibly based on a report of an RBI Internal Working Group [IWG] has the fingerprints of the Modi government written all over it. This proposal, along with some other recommendations, is part of a deeper game plan to control the banking industry. The proposal, if implemented, will completely reverse the enormous gains made in the last 50 years of retrieving the banking sector from the clutches of business houses”, Mr. Chidamabaram stated in his opening assertion.

“It is not the RBI’s idea. The RBI is used or misused to push the government agenda… The opaqueness leads us to believe it is entirely Mr Modi ji idea”, he acknowledged.

The complete deposits within the banking business was to the tune of ₹140 lakh crore. If enterprise houses had been allowed to personal banks, with a small fairness funding, they’d management very massive quantities of the nation’s monetary sources. “This must not happen and the Congress will strive its utmost to ensure that this will not happen”, he stated.

Three rules

All over the world three rules guided financial institution licensing: broad-based shareholding to mirror a shareholder democracy; strict separation of possession and administration; and prohibition of related lending or making a wall between the lender and the borrower. “All the three principles will be thrown out of the window if corporates and business houses are allowed to set up banks”, he famous.

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Mr. Chidamabaram identified that former RBI Governor Raghuram Rajan and former Deputy RBI Governor Viral Acharya had opposed the proposal. “It is shocking that such an idea should have been presented to people as though it has the imprimatur of experts and the endorsement of the RBI”, he noticed.

Former Congress chief Rahul Gandhi stated in a tweet, “Chronology samajhiye [understand]: First, karz maafi [loan waiver] for few big companies. Next, huge tax cuts for companies. Now, give people’s savings directly to banks set up by these same companies”.