Ever Thought or Noticed for 14-Sep-2017:
Have you ever noticed that there are about 50 Banks, 44 Mutual Fund AMCs, and 29 Life/ General Insurance Companies in India. Anyone having Rs. 1 Billion (100 Crores) can open a Life Insurance Company, or Rs. 5 Billion (500 Crores) can open a Bank, albeit with Govt permission. Do they all make profits, or provide value for the people? The answer is a big NO!
During the writing of my article (Administrative Reforms in
India) in 2007, I mooted the idea of consolidation of these financial entities
to clear clutter, improve efficiency and profits for them. The Govt has just
woken up last year and started doing that with the Banks starting with SBI.
Till 2015 they were granting new Banks, new AMCs etc. Ideally, we should have
only 6-8 Insurance companies, 8-12 Banks and 12-16 AMCs for a healthy
competition. On the other hand if we see the Telecom service providers, the
competition has cut their number to size about 6, which is good enough.
