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Opposition slams RBI’s plan to allow corporates to open banks

The real target of attack is Narendra Modi saying he is promoting crony capitalism

Eastern Times, New Delhi: A proposal by an Internal Working Group of the Reserve Bank of India to allow corporate houses to promote banks has drawn sharp criticism from the Opposition.

In a signed article former RBI governor Raghuram Rajan and former deputy governor Viral Acharya had called the suggestion a “bombshell”. The former bankers, respected economists both, said “to allow Indian corporate houses into banking either directly or through the NBFC route is best left on the shelf”.

Using Rajan and Acharya’s arguments, opposition parties, especially the Congress, have taken on the Narendra Modi government.

Rahul Gandhi in the past has called the Modi government a “suit-boot ka sarkar”.

On Tuesday Rahul Gandhi tweeted: “Chronology samjhiye: First, karz maafi for few big companies. Next, huge cuts for companies. Now, give people’s savings directly to banks set up by these same companies.”

Senior Congress leader and former Union finance minister P Chidambaram has joined the chorus. He has alleged that it’s only on paper the proposal is of the IWG. The actual person behind it is Narendra Modi.

Chidambaram said: “If corporate houses are allowed to set up banks then the whole world knows who will be the first ones to get the licences.”

Even without naming names it is obvious that Chidambaram was pointing at Mukesh Ambani and Gautam Adani.

“Across the world the move has been to diversify the ownership of the bank and not concentrate it in a few hands. There should be wall between owners and how a bank is run. There should be a difference between borrowers and lenders,” Chidambaram said.

The former finance minister said that the recent examples of how the government had to step in to save Laxmi Vilas Bank and Yes Bank are reasons enough to listen to Raghuram Rajan and Viral Acarya.

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