Hinduja Group welcomes RBI report on ownership in private sector banks

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NT NETWORK

Panaji

The Hinduja Group has welcomed the recent Reserve Bank of India (RBI) guidelines on ownership in private
sector banks. 

Reacting positively to the RBI Internal Working Group report on the Review of Extant Ownership Guidelines and Corporate Structure of Indian Private sector Banks (Mohanty report,  Ashok Hinduja , chairman, Hinduja Group of Companies (India), on Monday said, that, he hoped the RBI will be able to implement the guidelines within a specified
time frame.

“With the past policy interventions and this forward looking guidelines, undoubtedly the year 2020 belongs to RBI” he said in a press
statement.

According to Hinduja, the Working Group has taken a timely and bold stand by proposing a uniform regulatory framework for the entire banking system and dispensing with the regulatory arbitrage available between banks, NBFCs, small finance banks
and  payment banks.

“Like in many other fields, we should move to a one nation, one banking regulatory framework if we are to move towards realising our aspiration to be a $ 5 trillion economy. Solid banking apparatus
is a must.”

Hinduja pointed out that, shareholder equity has to be the first line of defense in a robust banking system and the RBI report rightfully puts a greater onus on the promoter-shareholders to exercise oversight through a higher shareholding limit of 26 per cent, with commensurate
voting rights.

“It helps strengthen the institutional framework by ensuring the promoter responsibility with more skin in the game, Supervisory stance for large conglomerates, including consolidated supervision will ensure the necessary check and balance in the system,”
he explained. 

Striking a note of caution, he advised ring fencing the banking sector from myriad emerging risk. “I am certain the RBI will exercise a continuous vigil as it has done in the past,” he said.