Small banks: lessons from local area banks
Description
The Reserve Bank of India (RBI) has released draft guidelines for establishing "small banks". While these guidelines make a reference to Local Area Banks (LABs), they do not draw specific learnings from them. There are four LABs in the country. They have been performing satisfactorily on most banking parameters, and have achieved deeper penetration without posing systemic risk. Two LABs failed in their early days but that instance was handled effectively. RBI would greatly benefit by reviewing its handling of LABs. Three major aspects need attention: ownership, capital and stability; systemic issues and concentration risks; operational issues of business model, freedom and autonomy. Read more at: https://www.livemint.com/Opinion/v4higxQgKD3c5kDIQ03sMK/Small-banks-lessons-from-local-area-banks.html
Copyright Date
July 2014
Publication Date
25-7-2014
Publication Title
LiveMint
Publisher
HT Media
Keywords
Banking, Small banks, Financial system, RBI
Source Link URL
https://www.livemint.com/Opinion/v4higxQgKD3c5kDIQ03sMK/Small-banks-lessons-from-local-area-banks.html
