Calling the proposal to let corporates and business houses enter into the banking sector a “completely retrograde” and “pernicious” idea, the Congress on Tuesday alleged that the government was “misusing” and “abusing” the RBI to push through its “dangerous agenda”.
The main opposition party asked all political parties and trade unions to come forward to oppose the proposal.
CPM general secretary Sitaram Yechury and his CPI counterpart D Raja too opposed the idea.
Former Finance Minister P Chidambaram said the proposal had the “fingerprints of the Modi government written all over it” and argued that it was “part of a deeper game plan to control the banking industry”.
“This is not the idea of the RBI. It cannot be the idea of the Internal Working Group (of the RBI) because everyone they consulted except one opposed the idea… RBI is being used or misused…,” Chidambaram said.
“All over the world, especially in developed economies, three principles govern banking: Broad based shareholding reflecting shareholder democracy, strict separation of ownership and management: ownership with shareholders and management in professional hands; and prohibition of connected lending; building a wall between lender and borrower. All three principles will be thrown out of the window if corporates and business houses are allowed to set up banks,” he said.
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