Deregulation and the limits to banking market competition: some insights from India
By: Sarkar, Jayati.
Contributor(s): Bhaumik, Sumon Kumar.
Material type:
ArticlePublisher: 1998Description: p.29-42.Subject(s): Banks - India | Banks
In:
International Journal of Development BankingSummary: Policy-makers around the world have emphasized the virtues of deregulation since the 1980s. In financial markets, deregulation has taken the form of removal of barriers to entry and licensing policies, as well as the dismantling of regulated interest rate regimes. These measures have been widely acclaimed as the harbingers of competition, competition being the stepping stone to higher levels of efficiency. Using theoretical caveats from the industrial organization literature and empirical evidence from the Indian banking industry, this paper argues that entry and branching deregulation and interest rate liberalization might not be the panacea that many policy-makers make them out to be. Specifically, the paper argues that competition might not naturally follow such deregulation if the incumbents are well entrenched in their market segments by virtue of sheer size and greater accessibility to customers. - Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | Volume no: 16, Issue no: 2 | Available | AR40999 |
Policy-makers around the world have emphasized the virtues of deregulation since the 1980s. In financial markets, deregulation has taken the form of removal of barriers to entry and licensing policies, as well as the dismantling of regulated interest rate regimes. These measures have been widely acclaimed as the harbingers of competition, competition being the stepping stone to higher levels of efficiency. Using theoretical caveats from the industrial organization literature and empirical evidence from the Indian banking industry, this paper argues that entry and branching deregulation and interest rate liberalization might not be the panacea that many policy-makers make them out to be. Specifically, the paper argues that competition might not naturally follow such deregulation if the incumbents are well entrenched in their market segments by virtue of sheer size and greater accessibility to customers. - Reproduced
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