Question

Do you believe that private banking should be more tightly regulated? If so, how and by whom? If not, why not?

Answer 1

Private banking is focussed on providing personalized advice to High net worth individual clients of a Bank or any other Financial institution. The range of services include estate planning, portfolio management, tax planning etc.

Yes, private banking does entail a lot of risk in the form of handling huge wealth of clients. The Relationship managers mapped to each client are also known to face conflicts of interest sometimes wherein they might be willing to jeopardize their client's financial interest for their own targets/ goals of the Bank or FI. Hence, there is a huge requirement for strict regulatory policies for this lucrative arm of banking. Regulations should be strictly adhered to and the Banks should be closely monitored by the Central Banks around the globe, the various legislative authorities etc. Infact, private banking has already faced strict regulations since the global crisis of 2008. The Consumer Protection act also requires a much higher level of accountability and transparency on the part of Banks/FIs.

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