oppn parties Towards A More Diversified Banking Sector In India

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  • Allahabad HC said that the UP Police is acting as law unto themselves as they detained a person unlawfully even before his arrest
  • Kolkata witnesses traffic snarls on the first day of the Durga Puja festival as revellers start pnadal-hopping
  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
  • Delhi Police detained Cockroach Janta Party founder Abhijeet Dipke, Neha Bora of AISA, student leaders and supporters ahead of a rally in Connaught Place demanding Chief Election Commissioner Gyanesh Kumar's resignation. The protest followed the detention and jailing of two CJP leaders earlier in the week over demonstrations at Jantar Mantar
  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
  • Indian shuttler Jagsher Singh Khangurra secured a bronze medal at the BWF World Junior Badminton Championships in Cairo
  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
oppn parties
Towards A More Diversified Banking Sector In India

By Linus Garg
First publised on 2020-11-21 12:02:10

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

An internal five-member committee of the Reserve bank of India (RBI) has recommended sweeping changes to banking norms to allow large corporate groups to float banks, increase their holding from 15% to 26% in 15 years, allow large, well-managed NBFCs to convert into banks and also allow payments bank to convert into small finance banks on meeting certain conditions. These are all excellent recommendations given the fast pace at which fintech is evolving and the sector is witnessing changes that are hugely disruptive. If Indian banks do not keep pace and if their capital structure and ownership remains restricted, they will become obsolete. Hence it is good that the RBI (as evident from the recent decision to merge the troubled Laxmi Vilas Bank with the Singapore-based DBS) is not averse to allowing private entities to play a bigger role in the banking sector.

Naysayers would point out that many PSBs were initially promoted and held by large corporate groups (Central Bank by the Tata group and Uco Bank by the Birla group) before they were nationalized due to mismanagement and the unethical practice of channeling public savings into other group companies of the promoters. But those were different times. Today, with proper laws, digitization, core banking and best practice regulations in place, it is almost impossible for any bank promoter or large shareholder to conduct related-party transactions at will. Owning banks is now a purely investment and commercial decision for these groups and the example of several successful private banks must form the template.

Channelizing public saving into productive sectors is a challenging task which is often rendered uneconomic due to government policies. PSBs are saddled with bad loans as many of their lending decisions are either made due to existing government policy or under political pressure. Private players will be free from such pressures and will make informed lending decisions based on best practices. But both have to flourish together as the funding of certain sectors that are ignored by the private banks is duty of the PSBs. Hence, it is good that the RBI is thinking of allowing a robust and diversified banking sector to exist in India.

Pic courtesy: Alpha Invesco

 

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