Bidders for India State Banks Should Have Deep Pockets, Says RBI
While the government has the final say in deciding the buyers, the bidders should meet RBI’s fit and proper criteria.
(Bloomberg) -- The potential owners of the soon-to-be privatized government-controlled banks must be financially strong to ensure that the lenders have robust risk buffers, the Reserve Bank of India Governor said.
While the government has the final say in deciding the buyers, from the regulator’s perspective, the bidders should meet RBI’s fit and proper criteria and have enough financial strength to capitalize the banks significantly, Governor Shaktikanta Das said in an interview to CNBC-TV 18 on Wednesday.
India’s finance minister had announced earlier this month that the government would privatize two of the 12 state banks in the country without naming the lenders. Indian financial system is stronger after the pandemic than in the aftermath of the global financial crisis in 2008, Das said.
Here are more comments from Das’s interview:
- There is no need for another one-time asset quality review as the RBI has significantly stepped up its supervision of banks and the top 100 shadow lenders.
- Uncertainty remains on the extent of new bad loans in the financial system given the ongoing regulatory dispensations.
- Have taken steps to tighten leveraging rules in core investment companies that fall under the shadow lenders’ category.
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