Congress opposes move to let corporates enter banking sector

New Delhi, Nov 25 : The Congress on Tuesday opposed the proposal to allow corporates and business houses enter the banking sector, contending that this move will leave the depositors at their mercy as it happened in the case of Yes Bank and Laxmi Vilas Bank.
Addressing a press conference, former Finance Minister P. Chidambaram said: “The Congress party condemns the proposal and demands that the government, unequivocally and forthwith, declare that it has no intention of pursuing the proposal.” “We call upon all the people of India and all political parties and trade unions to join us in resolutely opposing the retrograde idea of allowing corporates and business houses to enter the banking sector and set up banks,” he added.
The Congress alleged that the proposal, ostensibly based on a report of an RBI Internal Working Group, has the fingerprints of the Modi government written all over it.
This proposal, along with some other recommendations, is part of a deeper game plan to control the banking industry, it said, claiming that the proposal, if implemented, will completely reverse the enormous gains made in the last 50 years of retrieving the banking sector from the clutches of business houses.
Noting that all over the world, especially in developed economies, three principles govern banking — broad-based shareholding reflecting shareholder democracy, strict separation of ownership and management with ownership with shareholders and management in professional hands, and prohibition of connected lending, Chidambaram said that all three will be thrown out of the window if corporates and business houses are allowed to set up banks.