The addition of new banks will encourage faster modernization of banking operations and efficiency of the financial system, the better to support the growth and diversification of the financial service industry. Competition should positively affect the tariffs banks charge for their products and services, lower lending rates in line with credit risks, and make credit accessible to all sectors in the economy.
We continue to promote rural banking to improve financial intermediation in the rural areas of the country where banking penetration is still low. 3. Mr. Chairman, we are aware that while the entry of new banks would increase competition, excessive numbers within the system could dilute the franchise value of banks and increase instability.