The Issue Of New Bank Licenses

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The financial sector has been pertaining under pressure to the rising inflation and round the corner elections have been demanding the report card of the government. Amidst such conditions the talk about the financial sectors of the country would definitely spur a discussion on the issue of new bank licenses by the RBI. The discussions have nonetheless been hot-Why?? Well that is the part that has caused the hue and cry. The purpose that the RBI wishes or hopes to accomplish and the steps being taken is indeed speculative and doubts have been raised over the decision and what waits with it? It would either fulfill what it plans on doing or fail to fall back at the same stage as currently prevailing. A little look into what has been happening and we would be at a better position to understand the pros and cons of the whole scenario at hand.
The recent guidelines on New Bank Licenses by RBI have opened the doors for the entry of third set of private banks into the 73 trillion banking sector. Taking a look at the non-financial players like Aditya Birla Nuvo Ltd, Reliance Capital Ltd, L&T Finance Holdings Ltd, and Bajaj Finserv Ltd.which having a past record of sound credentials and integrity along with being financially sound have run the competition. Not only that, with a successful track record of 10 years, one would normally hope of improved productivity of the banking sector, which has been seen stagnating over the last few years and this gives a new opportunity for new
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