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Bank licences for corporates issue
Why is it in news?
- The RBI working group’s proposal to allow corporate houses to set up banks has drawn the attention of experts.
Details:
- The single window clearance system will enable the potential investor to interact with all the Ministries whose approvals are required.
- The system is expected to be place by March-end of next year.
- Centre’s industrial information system for potential investors now includes details of land availability in as many as 14 States.
- Former Reserve Bank Governor Raghuram Rajan and ex-Deputy Governor Viral Acharya criticised the proposal.
- Rajan said that the proposal to let industrial houses into banking will lead to connected lending.
- It may further exacerbate the concentration of economic (and political) power in certain business houses.