Trend to allow corporate India to open banks dangerous: Dasgupta
: The Yashwant Sinha-led Standing Committee on Finance has argued strongly against grant of banking licences to corporate houses.
Stating that industrial houses may not be geared to achieve the national objectives of financial inclusion, it has recommended that banking and industry be kept separate.
In its draft on “Policy on New Licenses in the Banking Sector,’’ a copy of which is with The Hindu , the committee has said that banking being a highly leveraged business involving public money and public welfare, it is of the considered opinion that it will be more in the fitness of things to keep industry and banking separate.
“As of march 2013, out of 15630 existing private sector bank branches, only 2699 are located in rural areas i.e. to say only about 17 per cent of the total branches are in rural areas. Given such a background, the committee are apprehensive that industrial/business houses may not be geared to achieve the national objective of financial inclusion, priority sector lending etc,” it said.