I am confused about the number of banks and credit union (sahakari) we have. Do we really need these many financial institutions, in compared to developed nations where few big banks, local and state banks operate?
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I am confused about the number of banks and credit union (sahakari) we have. Do we really need these many financial institutions, in compared to developed nations where few big banks, local and state banks operate?
There exists this many banks, because the country requires credit, whilst there are large foreign capital flows into the countries, waiting to be deposited.
This is what happens to every developing economy, and even leads to growth of shadow banking, as the official banks cannot even handle the volume of credits that is required by the economy.
But I do agree that the country needs to desparately rein in its financial sector now, as we are creating a massive credit bubble over land, which will definitely pop in the future, if remittances ever become disrupted or simply decline due to an ageing population.