Allow banking licences to stock broking firms: Assocham

 Industry body Assocham today said the Reserve Bank should consider allowing stock broking firms for a banking licence.

"Stock broking companies are under strict supervision and continuous monitoring of market regulator Sebi. They have deep penetration into various geographies and experience of understanding the client needs," Assocham said in a statement.

It added these entities could help in achieving financial inclusion.

"Some existing banks have subsidiaries involved in broking business and this will create an uneven playing field for the new banks," Assocham Secretary General D S Rawat said in his recommendations to the RBI.

Stock broking companies have good knowledge of financial services industry and this can surely come handy in running a successful banking business, he added.

Assocham further said it was not pragmatic and feasible to make it mandatory for a new bank to get listed within two years of licensing.

This period may be extended to five years, Rawat added.