India needs more banks to meet the financial needs of its people, said the leaders of the two largest lenders such as Rajnish Kumar, Chairman, State Bank of India (SBI), and Aditya Puri, the outgoing leader of privately owned HDFC Bank. They said that the governance of a lender matters more than its size as connected with the future of their industry.
Financial inclusion ensuring access to appropriate financial products and services needed by endangered groups such as weaker sections and low-income groups at a minimum cost fairly and transparently by important institutional players. It has become one of the most important aspects in the context of inclusive growth and development. The importance of an inclusive financial system is widely recognized in policy methods and has become a policy priority in many countries. Financial regulators, governments and the banking industry are the initiatives for financial inclusion.
The banking sector has taken an important role in financial inclusion. Legislative measures have been initiated in some countries. The Principles for Innovative Financial Inclusion provides a guide for policy and regulatory approaches with the aim to foster safe and sound adoption of innovative, effective, low-cost financial delivery models, helping to improve conditions for fair competition and a framework of incentives for the various banking, insurance, and non-banking entities involved and delivery of the full range of affordable and quality financial services.
In India has, broader financial inclusion for a long time, It was recognized the social and economic imperatives for broader financial inclusion and has made an enormous contribution to economic development by discovering innovative ways to empower the poor. The empirical evidence indicates that economic growth follows financial inclusion. It will promote business opportunities and definitely increase the gross domestic product, which will be reflected in the national income growth also.
According to Kumar, Consolidation does help in one aspect of managing large credit and project financing. For financial inclusion, they may need many banks. Puri said that “Consolidation for the sake of consolidation” is not feasible because the demand for financial services exceeds supply in the country.
