In the context of permitting industrial and business houses to promote banks, I would also like to mention that concerns had been raised by Prof. Joseph Stiglitz, the eminent economist, Dr. Y.V. Reddy, former Governor, RBI, and also in the IMF Staff Report. These concerns emanate from the likely conflict of interest in case industrial and business houses were allowed to own banks.
The reconstruction phase is expected to begin in earnest in 2012, with residential and nonresidential investment lifting growth sharply. Spare capacity and labour will be absorbed rapidly, and inflation pressures will pick up from current low levels, prompting interest rates increases.