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The Finance Insider

Sunday, December 16, 2012

The Reserve Bank of India (RBI) has regularly cited under penetration of loans and deposits in the country as reasons for issuing more bank licenses. However, as the data published by the central bank shows, as a share of GDP, the loans and deposits in Indian banks is 52% and 68% respectively. The same is fairly competitive to that in US, Brazil and France. Hence instead of issuing new bank licenses in a hurry, the RBI should vouch for the Indian banking sector's consolidation.

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