The Reserve Bank of India’s (RBI) final guidelines on the financial services businesses of commercial banks averted a major restructuring for 12 bank groups, Crisil Ratings said on Tuesday, December 9.

These banks accounted for 55% of sectoral advances cumulatively.

The final guidelines are aimed at eliminating any regulatory arbitrage by aligning regulations across bank group entities, thus contributing to structural strengthening, while providing flexibility in business conduct.

According to Crisil Ratings, the final guidelines on the financial services businesses of commercial banks ”provide flexibility with respect to overlapping lending activities within major bank groups. In the absence of this, 12 bank groups in India would have had to restructure their lending businesses”.

Earl

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