Banking Reform in India: Can it Support a Sustainable Economy?

Abstract

The banking reform bill 2012 was purported to bring more investment in banking sector in India. The legislation paved the way for more corporate houses to run banks by enabling Reserve Bank of India to issue new bank licenses. That could help India expanding the access of banking to large population who otherwise were denied the access. The increasing shareholder’s voting right would send the right signal in favor of pro-business government policy. But analysts were skeptical about the consequence of the reform. Could it help India to achieve inclusive Banking? Would it help economy in the long run? Or was the bill a mere signal without strategic commitment? The importance of policy reform for economic development, significance of corporate governance during policy reform, importance of strategic commitment of government during policy reform to achieve desired result.