Banking is too important to be held hostage to political expediency

.....The Bill seeks to do a number of things that are long overdue. These include raising the ceiling on voting rights in private banks from 10% to 26% and, most importantly, allowing the RBI to supersede the boards of banks. The latter is seen as an essential precondition for the grant of new bank licences. But the government is not without blame either. The Bill introduced in the Lok Sabha differs substantially from that cleared by the Standing Committee of Parliament, notably in that it allows banks to enter into futures trading in commodities. If the Banking Regulation Act, as it stands today, prohibits banks from trading in commodities, it does so for a very good reason. It exposes banks to excessive risks. It is best if such activities, if seen as desirable, are confined to a separate entity under a holding company that owns the bank as well......

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