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India needs 4-5 large banks to stop monopoly: RBI

India should aspire to have a few Indian multinational banks in the near future, by selective acquisitions, RBI says

August 16, 2013 11:10 IST | India Infoline News Service
The Reserve Bank of India (RBI) said that that there should be at least four or five large banks in the country to stop monopolistic market power.

According to RBI governor D Subbarao, At present there is a major skewness in the size of banks. The second largest bank in the country is almost one-third the size of the biggest bank. This creates a monopolistic situation, Subbarao added.

The RBI governor was speaking at the FICCI-IBA annual banking conference in Mumbai on Tuesday.

Subbarao further said that the task is to ensure that there are at least four to five banks of comparable size at all times. This will ensure that consolidated banks do not acquire monopolistic market power, adopt predatory behaviour and force smaller banks into unviable models.

According to him, the country should also aspire to have a few Indian multinational banks in the near future, by selective acquisitions.

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