Widening access

On the 25% rural branch condition that new applicants for bank licences may find too onerous for their liking
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First Published: Sat, Feb 23 2013. 12 16 AM IST
Former finance minister Pranab Mukherjee. Photo: Pradeep Gaur/Mint
Former finance minister Pranab Mukherjee. Photo: Pradeep Gaur/Mint
When then finance minister Pranab Mukherjee announced that the central bank was considering “giving some additional banking licences to private sector players”, it wasn’t an entirely expected move.
But the country’s banking system had emerged largely unscathed from the financial crisis. And India, Mukherjee said, was keen to see banks expand in number, size and reach, to ensure that more people had access to their services.
This explains the 25% rural branch condition, among others, that new applicants may find too onerous for their liking.
There’s no doubt that the potential for growth is enormous—after all, India’s banks are fairly modest in relation to giants in Asia and elsewhere.
But the number of applicants by the 1 July deadline will depend on whether a licence will make business sense given the conditions that need to be fulfilled.
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First Published: Sat, Feb 23 2013. 12 16 AM IST
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