The Reserve Bank has spoken out about its concerns with existing regulations for lenders. RBI governor D. Subbarao says he wants modifications to regulations so that private organizations don’t take advantage of their stakes in lending institutions. His concerns are mainly that companies could self-deal in banks that they promote, or that they could use the banks for easy funding.
Subbarao’s statement comes just days before RBI makes public its draft norms for new banks. Current rules prevent banks from lending to board members and interested parties. But RBI is worried these regulations are easy to get around.
Markets in India bounded upwards for a second day in a row after the US Federal Reserve indicated it was going to pull out all stops to stimulate the American economy. The Sensex jumped 157 points to 16,498. And the Nifty climbed 50 to 4,949.