India has a concentrated banking system, which means that if five individuals decide that this needs to be done, it will be done. These five are the finance minister, the Reserve Bank of India (RBI) governor and the chief executives of the top three banks. Prompted by proactive statements by the finance minister in his 2006 budget speech, RBI allowed banks the use of business correspondents to expand rapidly their outreach in a low-cost manner. (Business correspondents are intermediaries who carry out banking functions in villages or areas where it is not possible to open a branch.
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