RBI, Pick Widely-Held Cos for New Banks

........regulation is supposed to prevent and detect such behaviour. Second, when a bank becomes fragile, a “resolution corporation” (e.g., the US FDIC) is supposed to seize control, and sell off or shut down the bank. In India, we have problems on both fronts. Banking regulation and supervision is weak as the RBI is beset with an array of problems. The resolution corporation does not exist. The problems of ownership, governance and compensation should be seen as one unified question............

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