Bankers ask RBI to avoid regulatory arbitrage in specialised banking licence

Top bankers in the country today requested the Reserve Bank of India (RBI) to ensure that there is no regulatory arbitrage while offering specialised banking licences to some of the new players. The banking regulator had said it aims to strengthen the banking structure in India over the next few quarters through new entry,branch expansion and new varieties of banks. It had invited views from chiefs of existing banks on this subject. "In today's meeting, they (RBI) were wanting to hear our views. The biggest issue is that we should not disturb the equation of regulation and create a regulatory arbitrage. When we talk of (specialised) licensing, the biggest thing that needs to be kept in mind is that we do not allow a regulatory arbitrage to get created. That is the point that was really made," Chanda Kochhar, managing director and chief executive officer of the country's largest private lender ICICI Bank, said.

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