The entire state of Kerala is voicing its vehement opposition to the curbs imposed on the cooperative sector following the withdrawal of the Rs. 500 and Rs. 1000/- notes.
Allowing industrial houses to own banks would allow them to corner bulk of the credit for their own businesses through connected lending. It will be impossible to assess risks and regulate the banking sector in such a scenario. Moreover, it will further the concentration of financial power and political influence. It is for these reasons that many countries, including the United States, prohibit industrial houses from operating banks. South Korea prohibited industrial houses from promoting new banks following the financial crisis in 1997.