With conglomerates reluctant, PEs may be better source of capital for banks

PEs have deep pockets with the ability to recapitalise the bank as and when needed

It’s been two weeks since the Reserve Bank of India’s (RBI’s) internal working committee (IWC) report proposed the idea of allowing business conglomerates to own banks. Criticisms have far outweighed acceptance, even prompting the RBI governor to distance himself from the proposal recently. Amid the debate, it would be pertinent to ask if corporations would be willing to participate in the banking sector any longer. Barely one out of the 22 that had evinced interest when bank licensing opened up in 2016 seemed enthused today.

At least part of the reason could be the more stringent scrutiny that a banking