The Congress on Tuesday strongly opposed the proposal to allow business houses to get bank licences and said it will mobilise public opinion against this retrograde step which will have serious consequences.
Addressing a joint press conference, senior Congress leaders P. Chidambaram and Randeep Surjewala said the proposal is part of a deeper game plan to control the banking industry and depositors' money. The move is also aimed at weakening the public sector banks in the long run, they said.
"The Congress party condemns the proposal and demands that the government unequivocally and forthwith declare that it has no intention of pursuing the proposal," Chidambaram said.
"This is a complete retrograde and it has got very serious consequences," he added.
He said former RBI governor Raghuram Rajan and RBI deputy governor Viral Acharya have opposed the move to allow corporates to enter the banking sector and the Congress party would also join them.
He alleged that the decision was "opaque" and "the opaqueness leads us to believe this is entirely Mr Modi's idea".
Congress leader Rahul Gandhi also alleged that everyone should follow the chronology, as first a few big companies were given loan waiver and now they are being allowed to open banks to take control of public savings.
"Understand the chronology. First loan waiver for few big companies. Next, huge tax cuts for companies. Now, give people's savings directly to banks set up by these same companies," he tweeted, using the hashtag "SuitBootkiSarkar"
Surjewala said the Congress would talk to other political parties to oppose the move in the public interest.
He said the RBI was misused during demonetisation and is being misused again, and the Congress will strongly oppose this move.
The former finance minister said the Congress would approach political parties and trade unions to oppose the move and build public opinion against it.
"We call upon all the people of India and all political parties and trade unions to join us in resolutely opposing the retrograde idea of allowing corporates and business houses to enter the banking sector and set up banks," he said.
He said the proposal if implemented, will completely reverse the enormous gains made in the last 50 years of retrieving the banking sector from the clutches of business houses.
Chidambaram claimed the idea is not mooted by the RBI and has the fingerprints of the Modi government written all over it.
"It is not RBI's idea. The RBI is being misused by the government to propose this idea," he alleged.
The senior Congress leader alleged the RBI did not make the recommendation of demonetisation on its own and the Modi government "forced" the recommendation on it.
"India's most venerable institution is being misused and abused to push the political agenda of Mr Modi and his government," he alleged.
Chidambaram said the Congress is of the view that the banks should remain as public sector and the move is aimed at weakening the public sector banks.
He said once corporate houses are allowed to enter, what criterion would one allow to choose which corporate house would be proper.
"It will be a political largesse, political patronage and only the politically connected corporate houses would get these licences.
"We know who will get the first licences. There is a vast difference between professional bankers, highly qualified professionals being fit and proper persons promoting a bank. But to ask a corporate house to promote a bank is to pave the way for a monopolistic power over resources," he said.
"Only the politically connected corporate houses will get the bank licences," he alleged, saying the party would build public opinion against it as it is the biggest weapon against the government.
"Corporate and business houses should not be allowed entry into the banking sector and not be given licences to set up banks," he said.