BoI chief calls for level playing field

“The different treatment which is being extended to the FIs is not confined merely to the reserve requirements but extends beyond. It grants them a most favoured institution status in the areas of taxation, priority sector lending and pre-emption of funds, etc,” he said.

Bhide said authorities could perhaps consider taking measures for removal of the unevenness in the playing field and reduce the possibility of induced distortions.

He, however, said the entry of FIs into universal banking is a good development and BoI welcomes the new entrants in the market place. He said the distinction between commercial banking and term financial institutions is gradually disappearing and in its wake new opportunities are being opened to the banking sector.