in a significant way. The public sector banks and the foreign banks. But the Shyamla Gopinath committee report has demonstrated why public sector banks cannot be a holding company and yet retain a 51 per cent government control at the same time. That leaves only the foreign banks which should have been allowed to expand their presence as wholly owned subsidiaries of their principals abroad. Yet Morgan Stanley has just apparently surrendered its banking license and Goldman Sachs’ application too has apparently got rejected last year, though the bank has refused to comment on the development, either way.
In early January, one of the key deputy governors at the bank responsible for framing the policy on the issue has left. By the end of the month the financial sector secretary at the ministry too will have left but those departures are unlikely to change the institutional positions.
Subhomoy is a Deputy Editor based in New Delhi.