Banking business

Banking business

Banking business


This refers to the article “Don’t expect much from new banks” (May 5). Though the issue of new licences by the RBI may add to the number of banks, it cannot meet the objective of licensing of more banks, which is to add to the competition and improve financial inclusion. As it is, the geographical spread and concentration of banking is fairly sufficient to make financial inclusion a reality and generate constructive competition.



While the PSBs are weak with deteriorating financials, the cooperative banks and regional rural banks are too weak to make their presence felt adequately. They have not been able to fill the gaps in banking needs in their areas of jurisdiction. The private sector banks perhaps are more into businesses other than banking, and they seem to be moving without any proper direction and long-term objectives.



It is time the Government and the RBI strengthen the existing set-up before experimenting with new licences.



TV Gopalakrishnan



Bangalore