Thursday, April 10, 2014

Differentiated Bank Licence Old Wine In New Bottle?

Within two months, three weeks, and five days of the Nachiket Mor panel glorifying IDFC for proving its mettle as a differentiated bank in a shaky Indian banking industry, its chairman Rajiv Lall was told his company has been granted the licence to convert it into a full-fledged commercial bank. Soon after granting the licence to IDFC, and micro-lender Bandhan Financial Services, Reserve Bank of India Governor Raghuram Rajan said the industry is on the cusp of a transformation in the form of differentiated and ‘on-tap’ banking licences. Going by the two signposts of India’s current financial system — Rajan and Mor — the country could soon have, at least theoretically, 10 different types of banks, serving various constituencies — from retail to infrastructure. Does that mean that scores of new banks are a panacea to all the economic ills?.....

Read - ET

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