In the last round of giving licenses to private players, the outcome was a disaster.
Times Bank, Centurion and Global Trust Bank do not exist today. Only Kotak Bank thrives. The others, i.e. ICICI, Axis, IDBI were institution backed.
In this round, I shudder when I see the names of the hopefuls.
Another point is that none of the new banks seem to expand the banking reach. They will all remain focused on the metro centers and fight for the same pie.
I would rather that Peerless and Sahara get a banking licese. This way, they will survive, have branches where no bank dares to be in. Another advantage is that these two entities today have nearly 95% of deposit liabilities in G Secs etc., Their transition to banks would be the easiest. With RBI supervision and adherence to KYC and Money Laundering legislations, this should be the logical choice of the regulators. Two banks, with rural reach as well as regulatory oversight.
I heard IFCI (the largest failure in financial services, to my mind) spokesperson saying that they will access ‘cheaper’ money through deposits etc., Obviously, the gentleman forgot the SLR requirements and presumed that the lending style will continue unchanged. IFCI recently was in the news for lending money to the Suris of Morepen (


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