New Delhi: RSS-affiliated Swadeshi Jagran Manch (SJM) on Thursday said new RBI governor Shaktikanta Das should rethink regulatory framework for private bank ownership, so that it remains in Indian hands.
SJM said that the foreign funds are increasing their penetration among the public sector banks as well as taking the control of various private banks. “None of us want Indian home grown banks be allowed in the hands of foreign players,” it said.
SJM said that the maximum promoters’ ownership cap should be re-examined. “The country’s motive of bringing in private sector banks, in 2001, was to bring in more competition in this space and improving the access to credit to more Indians. Present guidelines for the compulsory dilution of the equity appears unnatural,” it said in paper.
SJM said that this is helping more foreign funds to make way into the Indian markets. “This is worrisome. India doesn’t have mature funds with deeper pockets to take up the equities in the banks, the forced equity dilution pushes the banks to go abroad,” said SJM.
It said that most countries with large domestic economy have strong presence of domestically owned and managed good banks. “It is must for India as well,” it said.
The paper said that it is important for an alignment of a bank with its country’s objectives — such alignment starts from a deep rooted passion for nation building, and which has a long term vision. “Such passion and dedication are typical of entrepreneurs who are domestic. Where will the foreign investors’ interest be —India or their country of origin?,” it said.
SJM said that last year, the RBI tweaked the rules and even made it easier for the foreign funds to take over Indian banks.
“Earlier this year, the Canadian fund Fairfax was allowed to take 51 per cent stake in the Catholic Syrian Bank. And now Bain Capital, TPG Group, Baring Private Equity Partners Asia, Blackstone et al, are queuing up to pick up 26 per cent to 51 per cent in Lakshmi Vilas Bank,” it said.
The tweaks and exceptions is only making roads easier for foreign funds to capture India’s financial markets, it said.
