The RBI in order to stimulate growth and help the Indian banking sector, has formulated guidelines for licensing of new private sector banks towards beefing up competition and garnering fresh capital for financial inclusion. The future will bring in innovative operating models to fund the aspirations of emerging ‘middle’ class and Indian corporate thinking of cross-border acquisitions.
With tele-density on the rise, TRAI India can consider the Kenyan model of ushering in financial inclusion through mobile banking services, including money-transfer systems and savings and- loans services, through a simple SMS network. This paper discusses the opportunities and challenges that lie ahead of the Indian banking industry. It also touches on some possible avenues for augmenting banking penetration in the strategically placed Eastern and Northeastern States of India.