The issue of having big banks has come back to the discussion table. The Indian banking system has a unique model where there are differentiated banks serving specific purposes.

Hence besides the commercial banks which are virtual universal banks, there are small finance banks, payments banks, and the cooperative banking system. There are evidently benefits from such a structure.

Case for big banks

With the aura of going global pervading economic thinking there are arguments being made for having big banks. First, there is the reputation issue. Today it has become axiomatic to be at the top — whether it is GDP or banks given the economic power that vests with India in the global space. Therefore, being a part of the top 100 or top 500 is an aspiration, and here size of banks matters. A

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