Friday, October 18, 2013

    RBI-Foreign Bank's Policy.

Mr.Raghuram G Rajan,RBI Governor said, RBI will soon come out with  a new
policy  for entry of  foreign banks that may even allow them to take over small
Indian banks. This move is not a good move as we are opening a big financial
market to foreign banks.As we know foreign banks are interested in only retail
credit and credit cards. They may not be willing to  operate in remote rural 
areas like State bank of India and public sector banks.If at all RBI wants to
open up & allow new foreign banks into the country, they may stipulate the
same conditions as they have set for new banks entry whose applications are
still pending with RBI.Foreign banks with their large capital base may swallow
few small banks which are prone and whose capital base is small.Once they take
over such small banks,they may close unviable branches and would like to operate
only in Tier  I and Tier II cities as they are interested only in their bottomline.

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