competition wizard published this article page no224
The
third area for banking sector reform is continuing to makc the banking sector
more competitive. India should continue to encourage the entry of private and
foreign players to foster greater competition and innovation in the sector. The
new policy of "on-tap" licensing of banks is a positive step in this
direction. However the entry requirements could be relaxed further to reduce
barriers to entry. Advocating a subsidiary structure will not only encourage
foreign banks to enter the Indian banking sector but it will also help limit
exposure to global shocks. In the long run greater competition will iiise the
efficiency and profitability of the sector. competition
wizard
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