Letter to BS: Banking regulatory powers should be ownership neutral

The RBI supervisors are placed in a difficult situation when they have to point out infirmities

The Reserve Bank of India (RBI) has spoken about the need for ownership-neutral regulation and supervision of banks. The central bank has said that it has no legal powers to appoint or remove the CMDs/MDs of public sector banks (PSBs), remove ineffective members of the PSB boards, merge PSBs etc. It has these powers in case of private banks. Earlier, the Financial Sector Assessment Programme carried out by the International Monetary Fund and the World Bank on the Indian financial sector (its report came out in December 2017) also mentioned this anomaly. Now, the Banking Board Bureau chairman has said