Should Private Co's be allowed to set up banks in India?

bank is a secured place where people keep their money safely.Few days ago SUPREME COURT of India ordered the SAHARA GROUP to return the 17400 crore rupees with interest to the people,from whom they collected this amount through their financial services arms.------if the big corporate group like SAHARA cheated the people like this way then how we trust others.In this purpose i would like to inform that SEBI has an objection against SAHARA from the begining,about the way they collect monet from people, but they(SAHARA)does'nt pay much attention to SEBI.--so this shows that in spite of strict regulations cheating is possible.By this decision of RBI common people have to suffer.

Why another 'breed' of Banks ? We have had Private Banks already ... !! For some reasons, in the past, the idea of LAB was abandoned.

Remember ... the draded the-then "Bank loan defaulters Cos." were tryinh to establish Local Area Banks in the past ? They may come ahead even now  to float a Bank to gurner cheap fund only to be used by them and there peers .. !! May they come ahead for Priority Sector Lendings as done by PSU Banks ? May their practices be 'etical' as seen in case of PSU Banks ?

Dont think such a scheme should be permitted to those 'black-listed' in a haste.

----------------------------------------------- latest from Budget ' 10  --    Mr Finance Minister has gone ahead in creating LAB / Private Banks (new edition) in his budget speech. Question : we talk of 'consolidation of Banks, mergers and amalgamations' etc .. then  why more new Banks ?

No private cos should not be allowed to set up banks in India as there are already plenty of Nationalised, private, multinational and co-op banks operating in almost every nook and corner of India. We have already talked and disscussed about mergers & aquisitions of different banks to form a bigger entities or banks so as to promote sharing of knowledge & cutting edge technology.

                                     We should put in efforts to make the services of numerous co-op and private banks better and make them accountable for their task. Many co-op banks have gone bust in the past. All that RBI could do was either intervene and facilitate the takeover of that bank by some bigger bank or close down the bank completely leaving thousands of its customers in the lurch.

                                We should strive to make our banking system better and their dealing fully accountable rather than allowing new pvt cos to set up banks in India and pave way for further financial scams frauds and closure of banks there by creating a crisis rather than development.

There is grave danger of the big corporates manipulating the system and wreaking havoc. I would say don't give them the leeway, at all

I too believe that RBI may restrain from allowing private companies to set up banks. For reasons ranging from specialized expertise in banking to the implications for Banks excluding 16 major PSU banks. By letting private co to start a bank, RBI may try to improve both capital formation as well as banking services penetration. However as we all know, businesses go to places where they can make quick wins. That if happens voids the banking penetration. On the other hand, the allowance to offer banking servcies will present larger regulatory burden on RBI. Also the possibility of mis-utilization of acquired capital by the private frims can not be ruled out. We have several pre-cendents in NBFC sector. The very fundamental responsibility of ensuring credit supply to larger economy may also be compromised if the private cos. are allowed to venture into Banking services.

In the current economic scenario i would not encourage such a move. Infact, we have to further strengthen the existing banks and other financial institutions with proper monitoring and stringent regulations so that what happened in the US last year should not happen in India in the years to come. Besides, we already have NBFCs and other co-operative societies to take care of financial needs at a micro level.

Yes I support the argument by Mr. Asoke Kusari

NO Never, Already all private parties are looting public money in the form of IPO's priced at exhorbitant premiums.

If given a chance to handle public money they will swindle everything and vanish one day, like what had happened in US (Insurance companies and Stock brokers)

Hence Private Companies should never be allowed to set up Banks. This will only increase Scams in the  form of fradulent Loans  and risk of losing one's money at any point of time for no fault of him.