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Kashmir Live |
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New Delhi, July 23: Foreign banks have failed to increase their stake in the Indian private sector banks in any significant manner primarily because the Reserve Bank of India (RBI) did not come up with its list of ‘weak’ banks, as indicated earlier.
Analysts said, the central bank had also said that it would define the criteria for a weak bank. “However, the RBI never came up with any such list or the criteria which proved to be a dampener for the prospective foreign investors,” an analyst said.
Though the RBI had said that incremental foreign direct investment (FDI) would be allowed in domestic private banks, it also specified that beyond the 5% level, the foreign investors needed prior permission from the RBI. It said, no hostile takeovers would be allowed. But after 2009, the restrictions would be lifted, the central bank had said in a road map for FDI in private banks.
“The central bank was expected to come up with a list of weak banks, which could have been potential targets for foreign investors. However, the list never came and the subsequent ambiguity in the policy has discouraged foreign entities from picking up stake private sector banks,” a banker said.
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| • RBI had said incremental FDI would be allowed in domestic private banks © 2008: Indian Express Newspapers (Mumbai) Ltd. All rights reserved throughout the world |
