The banking win-win

The year-end holiday spirit will certainly be missing this year at the Reserve Bank of India’s ( RBI’s) headquarters on Mint Road. For Finance Minister P Chidambaram has just taken away the RBI’s last reason to delay the final guidelines for new banking licences. In fact, the Banking Laws (Amendment) Bill, which the Lok Sabha passed on Tuesday and the Rajya Sabha is due to vote on Thursday, has given the central bank everything it asked for: greater regulatory oversight over banks, the ability to overrule boards and the power to inspect the books of associate companies of the promoter group — its preconditions for new licences.

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