The threat of new entrants in the banking industry are quite low This is mainly due to the growing

trend of deregulation and opening of various Indian sectors to MNCs The whole process of setting up a new bank isn't that complex as RBI is taking a policy decision in order to reach its goal of financial inclusion Also major threat to Indian Banks is not from opening up of new banks but entrepreneurs & others engaging in payment business and other financial services which is a major revenue generator

Minimum Capital Requirement for starting a new Bank = Rs 1000 Crore Present FDI policy allows 74% foreign equity in private sector banking Also a lock in period of first 10 years of operation exists License Fee of 500 Crore Mandatory Setting up branches in Rural area(one forth of total branch network)

Indian banking sector has 81 commercial banks with total assets of around Rs. 60 trillion. 27 are owned by the government, 22 are private sector banks and 32 are foreign banks