New Licence Policy will be Banking’s 1991 Moment

Banking had a ?clubby? feeling to it ? if you got in, you had a licence to take deposits, lend loans participate in interbank settlements. What added to the feeling was that joining the club was difficult, as only a couple of licences were issued every 10 years or so. Under the new bank guidelines announced by RBI on Monday, licences will be allowed on tap, subject to certain conditions. There is no doubt that this policy is to banking what the 1991 reforms were to India?s destiny.
By 2025, just a decade from now, India?s GDP will be $6-7 trillion if nominal GDP grows by 13% (8% growth plus 5% inflation). The population will be 1.5 billion, of which 40% will be urban, literacy will have risen to 80%. The market for passenger cars will be about seven million a year and 320 million people will travel by air every year. In short, in the next 10 years, India will add more to its GDP than it did in the last 68 years (source TOI research).

By: V Vaidyanathan

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