One of the latest initiatives of RBI aims at enhancing the level of corporate governance in banks. In view of the special status enjoyed by banks whereby they freely accept deposits from the public and leverage on such funds through credit creation, legal prescription for ownership and governance of banks have been laid down in the Banking Regulation Act, 1949.
This is against a backdrop of weak growth in credit extension to households, low levels of consumer confidence, higher tax burdens, and the absence of significant wealth effects. By contrast, some support to consumption expenditure is expected to come from lower inflation and real, albeit modest, wage growth.