RBI Must Re-examine Investment Criteria: M Rajeshwar Rao Urges Flexibility for Growth

• Former RBI Deputy Governor M Rajeshwar Rao advocates for a relook at 'fit and proper' criteria for investments.
• He emphasizes the need for financial institutions with significant capacity to support India's economic growth aspirations.
• Rao suggests regulators consider flexibility for consolidation and capital raising in private sector banks and across the financial sector.
• He highlights the need for 'players with heft' to achieve India's long-term growth ambitions, including consolidation options.
• Rao also points out challenges in cooperative banking and the need for consolidation among the large number of small NBFCs.