Early next year, the Reserve Bank of India is likely to permit formation of new banks. Though the RBI initially was against allowing industrial houses to enter banking in view of possible vested interests, the Ministry of Finance succeeded in vetoing RBI's resistance.
Will corruption be involved in sanctioning licences? Only the pathologically naive will think otherwise.
The Economist magazine has a perceptive take on this. It says, "In corruption-afflicted India wild tales of bribes being paid to political parties abound: $75m is the asking rate for a licence, gossips the CEO of a financial firm. He thinks the Supreme Court will end up investigating. The head of a bank says he has been told by an opposition politician that if his party is in power after the next election , 'the winners of the licences will go to jail'." An intriguing twist to the Winner's Curse?
Will corruption be involved in sanctioning licences? Only the pathologically naive will think otherwise.
The Economist magazine has a perceptive take on this. It says, "In corruption-afflicted India wild tales of bribes being paid to political parties abound: $75m is the asking rate for a licence, gossips the CEO of a financial firm. He thinks the Supreme Court will end up investigating. The head of a bank says he has been told by an opposition politician that if his party is in power after the next election , 'the winners of the licences will go to jail'." An intriguing twist to the Winner's Curse?
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