It does appear that the banking system in India is too fragmented at present. There is evidence, as measured by Herfindahl-Hirschmann Index (HHI) for Indian banking sector using square of on-balance sheet market share of all banks in the system which works out to be 518.53. This indicates that our banking system is highly fragmented and diffused.
Insurers and reinsurers have revised their underwriting philosophies, developed new models to assess risk, improved the adequacy of their risk profiles, and adjusted their coverage policies. Many regulators have also made significant changes to ensure that their regulations keep pace with developments or, at least, do not fall too far behind.