The RBI's proposed revised guidelines for licensing of new private banks balances well the necessity of opening up the sector and having more banks with prudential regulation to ensure that there is little room for concentration, said Mr D.R. Dogra, Managing Director and Chief Executive Officer, Credit Analysis and Research Ltd.
This will give scope to NBFCs to make inroads into the banking segment; they have a strong presence in some non-metro centres where banking is required. However, it should be recognised that for the enterprises to be commercially viable these banks should not be repressed with financial inclusion conditions especially if there are new entities that are coming into this field, he said.
Maybe the priority sector norms should be placed in a phased manner, or else new entities will find it difficult to carve a niche for themselves in a very competitive set-up, Mr Dogra said.
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