ISAS Insights

The Reserve Bank of India (RBI) does not have an articulated policy for the expansion of private sector banking in India. There have been two guidelines, issued in 1993 and 2001, under which the RBI granted some licenses for private sector banking. For the first time now, the RBI has put out a discussion paper on a new strategy - of permitting corporate houses to enter the banking industry in India. As an effort to bring transparency to policy making in this important sphere, it is a very welcome move. However, there are some concerns and this paper highlights some of the issues posed by the discussion paper.