...............There are four LABs in the country. They have been performing satisfactorily on most banking parameters, and have achieved deeper penetration without posing systemic risk. Two LABs failed in their early days but that instance was handled effectively. RBI would greatly benefit by reviewing its handling of LABs. Three major aspects need attention: ownership, capital and stability; systemic issues and concentration risks; operational issues of business model, freedom and autonomy...........
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