The RBI has been openly encouraging a debate on this issue and the draft would be reviewed on the basis of the feedback received from various quarters. In this context, I would only make two brief comments. First, the banking system is central to the country’s economy irrespective of whether banks are locally or foreign owned.
Some countries like Australia feel that banks are so systemically important that foreign controlled banks are precluded. Our stance in India is on the middle ground where foreign ownership of banks has been permitted on certain conditions.