Expanded financial activities for banking organizations requires, the Board believes, that those firms operating in markets that banks can enter should, in turn, be authorized to engage in banking. However, some of these nonbanking financial firms already own -- or are owned by -nonfinancial entities.
I don’t believe the government suffers any less from conflicts of interest in debt management (unlike the views of the FSLRC), but the RBI could well carry out the government’s instructions without any loss in welfare. I imagine, however, that the government will depend on deputations from the RBI for a while for advice.