Besides, the adoption of ICT solutions that are essential for accessing mainstream payments system requires larger investments and these often prove to be too onerous for small entities and render them uncompetitive. We have encouraged merger of non viable entities and growth of banks that meet regulatory requirements.
We have also followed a three tiered regulatory approach – “non-Basel” approach for regional rural banks and rural cooperatives with the objective of ensuring positive net worth, “Basel I” for urban cooperative banks and “Basel II” for commercial banks.