India Should Have Few Multinational Banks of Its Own


India Should Have Few Multinational Banks of Its Own

Bangalore: India should have few multinational banks of its own through some selective acquisition, said RBI governor D Subbarao at a banking summit organized by industry body Ficci. However, the governor also warned against making "too-large-to-fail" banks, commenting that a monopolist is not required but a number of comparatively large banks, reports Times of India.

Subbarao further said that there are two classifications of large banks. First, banks that have big asset size and second, banks that are international. "Some of the Chinese banks fit into the first definition but they are not global. Some of the American or European banks may not be large in terms of assets but they have a presence in many jurisdictions," said the governor.

According to Subbarao, for Indian banks, it would take years to attain the status of a large global bank. "However, we should aspire to have a few Indian multinational banks in the near future by selective acquisition," said Subbarao.

He further added that a monopolistic situation is created as second largest bank in the system is almost one-third the size of the biggest bank. The job is to make sure that there are at least four-five banks of comparable size so that they can ensure the bigger banks do not take over monopolistic market power, adopt predatory behavior and force smaller banks into unviable models.

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