The Government and Reserve Bank of India (RBI) should desist from giving new bank licences to industrial houses, a Parliamentary Panel has suggested.
Banking being a highly leveraged business involving public money and public welfare, it will be more in the fitness of things to keep industry and banking separate, the Standing Committee on Finance has said.
The Government/ Reserve Bank of India should review the licensing guidelines accordingly, this report tabled in Lok Sabha today said.
The Standing Committee on Finance headed by Yashwant Sinha has urged the Government/RBI to ensure that no recurrence of the pre-nationalised situation happens, when the management of private banks deployed their funds to extend undue favour to their own industrial owners without regard to social priorities determined by Government.