AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
The Morning Brief
Now RBI Wants Banks to Rethink their Business Models
Nov 5, 2024
Sangita Mehta, ET’s Banking Editor, and Sachin Gupta, Chief Ratings Officer at CARE Ratings Ltd, dive deep into the RBI's latest draft guidelines. They discuss the significant shift requiring banks to handle lending and deposit activities directly, which could reshape banking structures and balance sheets. The conversation highlights how these regulations may challenge traditional practices, impact upcoming IPOs, and even lead to potential mergers among banks. The duo provides keen insights into the evolving landscape of the banking sector and consumer protections.
14:35
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The RBI's draft guidelines aim to correct overlapping services between banks and subsidiaries, ensuring core banking functions like lending are retained solely by banks to bolster system integrity.
- Implementing these regulations may require major financial institutions to restructure their operations and could significantly impact their IPO valuations and growth strategies.
Deep dives
RBI's Draft Norms and Core Banking Activities
Recent draft norms proposed by the RBI suggest that core banking activities such as deposit mobilization and lending should be strictly within the banks and not conducted through subsidiaries. This aims to address the overlap in services offered by banks and non-banking financial companies (NBFCs), which can confuse customers. By requiring that these functions be consolidated, the RBI seeks to protect the integrity of core banking operations and minimize systemic risks associated with financial activities that intermingle between different entities. Such regulatory measures could lead to significant restructuring within banks, impacting their current business models and operations.
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode