India needs hundreds more banks; their ownership is not the main point

While deciding on policy regarding ownership of banks, it would be good to remember that banking is a commercial activity and therefore can't have zero risk

Does India have too many banks? Does it have too few? How many banks must a country have anyway?

These are the real issues that the RBI needs to discuss and not merely who owns a bank. But then we are Indians, prone to be distracted very easily.

Let’s just start with two crucial numbers. These should help focus minds. One, the credit-GDP ratio in India is a miserable 50 percent. In countries with comparable economies the ratio is over 200 percent. Two, this ratio is a function of the number of banks a country has. Thus, at last count