— by a special contributor
Applicants for new bank licences will be required to furnish their business plans for the banks along with their applications. The business plan will have to address how the bank proposes to achieve financial inclusion. – Reserve Bank of India, “Guidelines for Licensing of New Banks in the Private Sector”, February 22, 2013.
The Indian banking sector is under the spotlight, as new private sector licences are expected to be issued on an ongoing basis from 2014. It is also highly likely that large industrial houses may be permitted to set up banks, overturning a banking policy that prevailed since the first round of bank nationalization in 1969. According to the RBI, one of the principal purposes of issuing fresh licences is to achieve ‘financial inclusion’ – to bring the large numbers of persons without access to banking services into the financial system. When announcing the The authorities claim that such financial inclusion will help bring about more balanced growth and reduce poverty.
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