New Delhi, Aug 29 (KNN)  In a debate on small banks versus large banks, a Reserve Bank of India (RBI) discussion paper has said that small local banks play an important role for extension of credit to small enterprises.

However, there are several issues relating to small banks which need to be addressed.

“Small local banks play an important role in the supply of credit to small enterprises and agriculture and banking services in unbanked and under banked regions in the country.

While, permitting large number of small banks, however, the issues relating to their size, numbers, capital requirements, exposure norms, regulatory prescriptions, corporate governance and resolution need to be suitable addressed,” the RBI discussion paper on banking structures said.

The objective of the discussion paper by the RBI is to impart dynamism and flexibility to the evolving banking structure.

The paper indicated that the bank re-orientation may, among others, embrace many small privately owned local banks and cooperative banks.

The RBI has sought comments from the public and stakeholders on the discussion paper. (KNN/PC)