| | The committee on financial
sector reforms highlights
several concerns on the
Indian banking sector – about
financial deepening, inadequate
competition, lack of scale, high
spreads banking, the low usage
of new technologies, the decline
in market share of public sector
banks, etc. These concerns
are either valid only up to a
point or are misplaced when
viewed against the totality of
the Indian banking situation.
Concern is also expressed about
social obligations, delinking
the government from banks
and greater freedom to private
banks – these too are not
valid concerns. Indian banking
is in a reasonably healthy state
and is evolving in the right
direction. It needs incremental,
not sweeping, changes.
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