Wednesday, May 07, 2014

Competition in Indian banking will be slow in coming

The RBI's decision to use a fresh set of licenses to banks had raised hopes that a new set of players would enter and invigorate competition in banking. Those hopes have since faded as the RBI granted 'in-principle' licenses to only two players.

For now, corporate houses are out. Newer players may have to come in as specialised players in wholesale banking, payments, infrastructure etc. There may not be many full-scope banks coming in. So, expect competition to be muted.

But does Indian banking lack competition at all? What is the rationale for letting in new players? More in my article in Hindu Business Line.

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