CPI raises conflict of interest issue of Birla's bank plea

CPI today raised the issue of conflict of interest with regard to A V Birla bank licence application to RBI and asked for removal of K M Birla, the group's Chairman, from the board of the central bank.
It also raised objections to RBI granting licences to private sector, particularly corporate sector, to open banks.
"CPI is of the view that this will lead to unhealthy consequences. We also have serious reservations on the process of licencing of new banks," the party said in a statement here.
Among the 26 applicants, there is also an application submitted by Adiyta Birla Nuvo, a group company of A V Birla group company, seeking a new banking licence belonging to Aditya Birla group under the Chairmanship of Kumar Mangalam Birla.

K M Birla has been a member of the board of RBI for the past six years.
"This is a serious conflict of interest where a board member of RBI is also one of the applicants for a bank," the party said.
The government and RBI should also reconsider about issuing licences to private sector instead of expanding the public sector banks which are doing excellent job.
RBI Governor D Subbarao had said last week that he would discuss the issue of conflict of interest of K M Birla with the government.