Letters to the editor

Kudos to D Subbarao, RBI governor, who said that no new banking licence would be given without legal backing (“Subbarao warns against casino banking”, FE, November 16). The governor’s assertion that the apex bank is not in a hurry to issue banking licences to new private banks despite pressure from the finance ministry is laudable. We already have umpteen number of banks, both in the government sector and private, and a careful study of the functioning of these banks would reveal inadequacy in expected achievements despite absolute freedom given to them by both the finance ministry and RBI. While political interference has crippled the desired growth of government banks, the private sector banks have earned their cake by making the consumers pay heavy interest and, in many cases, penal interest. Just think what are we going to achieve or in what way the aam aadmi is going to benefit if new licences are given?