CII welcomes new banks in private sector

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New Delhi, Oct 8: The Confederation of Indian Industry (CII) accepted the proposal made by Reserve Bank of India (RBI) in welcoming more new banks in private sector to fund India's economic growth.

"New banks would be required to fund India"s growth and to drive the inclusion agenda forward," CII Official stated on Oct 7.

However, the officials from CII also asserted that the minimum capital for new banks should be at least Rs 1000 crores as lower capital could result in relatively small banks, which could potentially lead to higher risk taking and more volatile earnings.

Pointing out that the smallest new private sector bank and several NBFCs have more than Rs 1000 crore capital, the official stated that licensing new banks without the minimum announced money may result in lack of focus to financial inclusion.

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