Private banking licensing: very few will qualify

Abstract

The Reserve Bank of India’s discussion paper on entry of new banks in the private sector lists a number of issues in the next round of licensing of such banks. If the new private banks are to focus on inclusion, then a number of possible candidates – including industrial houses – would possibly be ruled out. Deep pockets, sound governance and an appetite for financial inclusion are not terribly common and these requirements cannot be relaxed merely in order to have more players.