RBI favours differentiated banks,one for low-income households

The panel suggested a slew of dedicated banks to be formed, including the ‘wholesale banks' which will lend big amounts but should not raise over Rs 5 crore from a single depositor.

The report suggested a bank dedicated to funding infrastructure projects. This comes in the backdrop of projection that infrastructure sector would require an investment of USD 1 trillion during the 12th Plan (2012-17).

At present, the country has a universal banking system wherein lenders serve all the needs. However, there have been a lot of issues due to which the idea of differentiated banking has been gaining ground.  The RBI, in a paper on ‘banking structure' released last August, also spoke of moving away from the universal banking approach.

Some analysts feel RBI may start the process of differentiated licensing with the current round of banking applications itself.