Context: Granting license to corporates to promote banks will be disastrous to the economy as a whole. Background Recently, the RBI constituted an Internal Working Group to determine if large corporate houses can be given licence to promote banks. The Internal Working Group recommended to allow corporate houses to operate banks. What are the concerns… Continue reading Why Corporate houses should not own banks?
Tag: ECO_4
Permitting industrial houses to own banks
Context: Permitting industrial houses to own banks could undermine economic growth and democracy. Background Recently, an internal working group of the RBI has made a far-reaching recommendation to permit industrial houses to own and control banks. According to the report, the reason for permitting industrial houses to own and control banks is that industry-owned banks would… Continue reading Permitting industrial houses to own banks
Corporates as Bankers: Bane or boon for economy?
A recent report by an Internal Working Group (IWG) of the Reserve Bank of India has attracted a lot of attention as well as criticism for its recommendations including the one that suggests corporate houses be given bank licences. Rationale to constitute IWG by RBI: The IWG was constituted to “review extant ownership guidelines and… Continue reading Corporates as Bankers: Bane or boon for economy?
corporate houses in Indian banking
Context: Recently, an Internal Working Group of the Reserve Bank of India (RBI) has recommended that corporate houses be given bank licences. Background Earlier, in 2013, the RBI had issued similar guidelines permitting corporate and industrial houses to apply for a banking licence. However, no corporate was given a bank licence as none of the… Continue reading corporate houses in Indian banking
Banking reforms
Context- RBI committee has recommended a series of changes that could transform the banking landscape by paving the way for large industrial conglomerates to set up banks. What are Non-Banking Financial Companies NBFCs? These are establishments that provide financial services and banking facilities without meeting the legal definition of a Bank. Hence they are frequently referred… Continue reading Banking reforms
Lakshmi Vilas Bank (LVB) merger with DBS bank
Context: Lakshmi Vilas Bank (LVB) merger with DBS bank is justified Why RBI decided for merger of Lakshmi Vilas Bank (LVB) amalgamation with DBS bank? Erosion of trust in financial institutions: India, over the past two years has seen the collapse of four financial firms: IL&FS, Dewan Housing Finance, Punjab and Maharashtra Cooperative Bank and Yes… Continue reading Lakshmi Vilas Bank (LVB) merger with DBS bank
lakshmi vilas bank crisis
What are the reason of RBI to put LVB under moratorium and amalgamated with DBS Bank? The RBI has now decided to impose a 30-day moratorium on Lakshmi Vilas Bank Ltd (LVB) due to the following reasons- Continuous Losses: The RBI said the financial position was declining steadily, with continuous losses over the last three… Continue reading lakshmi vilas bank crisis
Issue of Lakshmi Vilas Bank | 19th November
News: Reserve Bank of India imposed a 30-day moratorium on Chennai based Lakshmi Vilas Bank Ltd (LVB) and put in place a draft scheme for its amalgamation since its financial position underwent steady decline and posted loss for the last 3 consecutive years. Under these developments, RBI has imposed the following conditions: RBI has put… Continue reading Issue of Lakshmi Vilas Bank | 19th November
Moratorium on Lakshmi Vilas Bank
Context: RBI has imposed a moratorium on Lakshmi Vilas Bank and drafted a scheme for a merger. Why it is a concern? Already, India’s banking system is distressed due to the failures of IL&FS, Punjab & Maharashtra Cooperative Bank and DHFL, followed by the bailout of Yes Bank. Now, the Reserve Bank of India decision to… Continue reading Moratorium on Lakshmi Vilas Bank
Priority Sector Lending (PSL) guidelines
Reserve Bank of India (RBI) released revised priority sector lending (PSL) guidelines to augment funding for COVID-19 impacted companies. Facts: Aim: To align Priority Sector lending with emerging national priorities and bring sharper focus on inclusive development. Key Revised PSL Guidelines: Bank finance for start-ups (up to ₹50 crore), loans to farmers for installation of… Continue reading Priority Sector Lending (PSL) guidelines
