The need for corporate-backed banks for funding infra and MSMEs : News Reel: Business Today
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The need for corporate-backed banks for funding infra and MSMEs

Anand Adhikari | December 9, 2020

The Reserve Bank of India's working group has recommended allowing large corporate and industrial  houses to set up commercial banks.  This is a big shift in the RBI's policy of granting banking licenses. The working group is also in favour of allowing well established NBFCs promoted by the large industrial houses to convert into banking entities.

But the banking Licensing framework for large corporations should fix credit gaps in the financial system. The country today needs large banking units to fund infrastructure and MSMEs to create future revenue generating assets like roads , ports and airports , support manufacturing and create a good network of ancillary units for the world  and create employment opportunities. The retail banking space is already a crowded space and entry of new banks would only create more clones of the same. Anand Adhikari, Executive Editor, Business Today, explains more.

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