........The committee rightly recommends that RBI should step down from the board of banks, which makes a lot of sense. Having a regulator on the board of the regulated actually makes the regulator a part of all actions, which raises ambiguity when it comes to inspection as all decisions have implicitly been approved by the regulator. However, in the same breath, it also recommends that the directors on board of old private banks should be approved by RBI. Given that we are trying to keep the government and RBI away from the functioning of banks, this step does look a bit out of place..............
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