most emerging markets, banking sector assets comprise well over 80 per cent of total financial sector assets, whereas these figures are much lower in the developed economies. furthermore, deposits as a share of total bank liabilities have declined since 1990 in many developed countries, while in developing countries public deposits continue to be dominant in banks. in india, the share of banking assets in total financial sector assets is around 75 per cent, as of end - march 2004. there is, no doubt, merit in recognising the importance of diversification in the institutional and instrument - specific aspects of financial intermediation in the interests of wider choice, competition and stability. however, the dominant role of banks in financial intermediation in emerging economies and particularly in india, will continue in the medium - term ; and the banks will continue to be “ special ” for a long time. in this regard, it is useful to emphasise the dominance of banks in the developing countries in promoting non - bank financial intermediaries and services including in development of debt - markets. even where role of banks is apparently diminishing in emerging markets, substantively, they continue to play a leading role in non - banking financing activities, including the development of financial markets. third, internationalisation of banking operations : the foreign controlled banking assets, as a proportion of total domestic banking assets, increased significantly in several european countries ( austria, ireland, spain, germany and nordic countries ), but increases have been fairly small in some others ( uk and switzerland ). amongst the emerging economies, while there was marked increase of foreign - controlled ownership in several latin american economies, the increase has, at best, been modest in the asian economies. available evidence seems to indicate some correlation between the extent of liberalisation of capital account in the emerging markets and the share of assets controlled by foreign banks. as per the evidence available, the foreign banks in india, which are present in the form of branches, seem to enjoy greater freedom in their operations, including retail banking, in the country on par with domestic banks, as compared with most of the other developing countries. furthermore, the profitability of their operations in india is considerably higher than that of the domestically - owned banks and, in fact, is higher than the foreign banks ’ operations in most other developing countries. india continues to grant branch licences more liberally than the commitments made to the wto. fourth, the share of state - owned banks in total banking sector assets : emerging economies,

s s mundra : a new banking landscape for new india keynote address by mr s s mundra, deputy governor of the reserve bank of india, at the mint ’ s annual banking conclave, 2015 on “ a new banking landscape for new india ”, mumbai, 29 january 2015. * * * 1. smt. arundhati bhattacharya, chairman, state bank of india ; smt. chanda kochhar, md and ceo, icici bank limited ; smt. shikha sharma, md & ceo, axis bank limited ; shri aditya puri, md, hdfc bank limited ; shri sunil kaushal, regional chief executive, india & south asia, standard chartered bank as also other senior members of the banking and financial sector ; members of the print and electronic media ; ladies and gentlemen! 2. at the outset, let me thank tamal and the mint management for inviting me to deliver the keynote address at the mint annual banking conclave. this event has become one of the most awaited events on the calendar of bankers. i last attended this event as a panelist in january 2014 when the topic for panel discussion was “ indian banking : a new banking landscape ” and this time it is enlarged to “ a new banking landscape for new india. ” 3. when i sat down to think about the theme of the conclave, i wondered what is new about india. is it the new political regime and consequential policy changes? is it the tag of being the new growth leader in the world economy? is it a more financially included india that is being thought about or is it a ‘ digital ’ or ‘ connected ’ india that is new. i think it is a bit of all and beyond. we all know that political stability is a necessary precursor to a sustained economic development anywhere in the world and a democratically elected government with decisive mandate is capable of launching significant pro - growth reforms. defining contours of new india 4. what are the defining contours of the new india? what are the themes that would play out over the next decade or two? to my mind, there are seven key themes which would define the indian economy and indian banking sector in the days to come. these are : • demography • urbanization • digitization • industrialization • education • inclusion and • global integration let me elaborate on a few of these in greater detail and delve upon the impact they could have on the banking system