RBI should look at banks to buy deposits:Leeladhar

With deposit-taking non-banking finance companies sharply declining, the Reserve Bank of India should look at the possibility of allowing only banks to take public deposits, a senior central bank official said on Thursday.

"A time has perhaps come when we can now think of only allowing banks to acquire public deposits," Reserve Bank Deputy-Governor V Leeladhar told reporters on the sidelines of an Indian Merchants Chamber organised banking conference in Mumbai on Thursday.

The number of deposit-taking NBFCs is sharply declining as also the

amount of deposits with them, Leeladhar said.

This would involve a policy action, he said, adding that "there would be a transition period...a time has come to take a fresh look (on the issue)," he said.

On consolidation among banks, Leeladhar said that it should be based on profitability and business considerations.

The respective boards of banks should take decisions on consolidation issues. "How strong the final (merged) entity  will be (should be considered)," he said.

There was, however, no deadline set for such  consolidation, he said.