Does India have too many banks? Does it have too few? How many banks must a country have anyway? These are the real issues that the RBI needs to discuss and not merely who owns a bank. But then we are Indians, prone to be distracted very easily. Let’s just start with two crucial numbers. These should help focus minds.
One, the credit-GDP ratio in India is a miserable 50 percent. In countries with comparable economies the ratio is over 200 percent. Two, this ratio is a function of the number of banks a country has. Thus, at last count the US and China both had over 4,000. So ...
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