Not under one institution, says Viral Acharya

Iam not a big fan of concentrating everything into a single entity. I like the idea of banks doing finance and doing the job of taking deposits and extending credits. We generally do not like the heavyhanded regulations of industrial companies or non-financial companies. I think embedded finance is a middle ground. In a structure of an economy, you will get a resilient system if different entities perform their task well and systems are differentiated functionally.

I am not proposing that these LSPs become credit extension agencies -- that could be a mistake. We cannot mix finance with commerce. We will run into problems. The way banks became too systemic to fail and then industries will become too big to fail as well. This would mean all risks will be socialised and there will be no risks left to be borne by private players.