The Government and RBI are not completely in line with the requirements of the hour if they plan to restrict new banks to cater to the needs of rural India only. This method of achieving financial inclusion does not seem to be apt.

A more promising step may be making extensive use of technology and innovative process. The New Pension System and the depository system which performs the entire function of dematerialization of shares do exemplify that a common infrastructure provider can maintain all the millions of accounts that banks need to service their customers. Thus it can be so done that on the basis of mutual agreement between customer and banker, a particular account may be allotted to a particular bank.

But this way of concentrating the activities of a particular set of banks to only a specific region or task does not seem worthy.

When crores of accounts are maintained on a common platform, the overhead costs would be thin on individual accounts and thus charges can be brought down to a great extent. People who have benefited themselves by making large amount of money from millions of small transactions are the mobile telecom players. Their technology and business model can be tapped to serve additionally as a banking platform as well.

Both the Government as well as the RBI should opt in for more innovative banking methods. Total bank lending accounts for less than half the size of GDP which thus gives ample room for money lenders to do business.

With more banks at a particular place, there will be more competition amongst he banks which will be beneficial to the customer. Thus the decision of who getting a bank license and who not needs to be taken with utmost care and all those who pass the test need to be given the same platform to play.