Over the years Reserve Bank has completely liberalised and has put it at the banks’ end the decision about their geographical expansion and coverage; banks are effectively free to decide how many branches and other channel outlets they should open, when and where these touch points should be located, etc.
They may be tempted to impose unduly restrictive rules in response to the challenge they face, arising from the complexity and dynamism of technology. Or they could be tempted to lower standards to encourage innovation and attract business, leading to the exploitation of regulatory arbitrage by firms.