Hinduja Group Welcomes RBI Report on Ownership Guidelines in the Indian Private Sector Banks

MUMBAI:
The Chairman of the Hinduja Group of Companies (India), Ashok Hinduja has welcomed the Reserve Bank of India Internal Working Group’s report on the Review of Extant Ownership Guidelines and Corporate Structure of Indian Private sector Banks (Mohanty Report).

He said “The Working Group has taken a timely and bold stand by proposing a uniform regulatory framework for the entire banking system, 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”.

Shareholder equity has to be the first line of defense in a robust banking system. “The Report rightfully puts a greater onus on the promoter-shareholders to exercise oversight through a higher shareholding limit of 26%, 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.”, Ashok Hinduja noted.

Striking a note of caution, “Ring fencing the banking sector from a myriad of emerging risks has to be a constant endeavour, and I am certain the Reserve Bank of India will exercise a continuous vigil as it has done in the past. We hope the RBI will be able to implement these 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.