The holding company model for PSBs is an idea whose time has come

The non-operative financial holding company (NOFHC) is back in the headlines, thanks to the report of the Reserve Bank of India’s internal working group (IWG) on ownership guidelines in private banks. While attention has been drawn to it in the context of the banking ambitions of large corporate groups and fine-tuning of structures within existing bank-led financial conglomerates, the elephant in the room is the applicability of the holding company model to state-run banks through the Bank Investment Company (BIC).

That’s because in the immediate future, a decision on the level of capital infusion needed for state-run banks is up