.........Writing in the Hindu Business Line (August 8, 2014) S S Tarapore made the following crisp observations about small banks and payment banks:
“The issue of a payments bank needs discussion...Small banks are vulnerable because of their limited geographical spread; a single natural disaster can wipe out the bank. Again, historically the Indian experience with small banks has not been encouraging.” If RBI is serious about the proposal to open small banks, the banking regulator should carry out a country-wide survey to assess the potential for opening small banks in different geographic areas, as the spread and growth of similarly placed institutions in commercial and cooperative sectors differ in different areas depending..........
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