Banking Reset 2.0: Tectonic changes are underway in Indian banking

Towards the end of the calendar year, an Internal Working Group (IWG) of the RBI made a case for large corporate groups being permitted to spawn banks

Dinesh Khara is an optimist. Despite the once-in-a-lifetime black-swan Covid-19, he sees “demand coming back with a vengeance.” The State Bank of India (SBI) chairman’s optimism is, however, not shared by the Reserve Bank of India (RBI). The summary of the chapter on ‘Policy Environment’ in its Report on the Trend and Progress of Banking in India 2019-20 (T&P 2019-20) ends with the line: “The challenge is to rewind various relaxations in a timely manner, reining in loan impairment and adequate capital infusion for a healthy banking sector.”

Tectonic changes are in play now, some which were set in motion