The banking licences granted by India’s central bank to entities such as telcos, e-commerce companies and microfinance firms are shaking up one of the most traditional banking sectors in the Asia-Pacific region, threatening the dominance of the full-service public sector banks.

As India's public sector banks work to rid their balance sheets of legacy assets, could this be a chance for private sector banks to finally bulk up their market share? 

Ahead of the 2016 Asian Development Bank annual meeting in Frankfurt, the president of the ADB discusses China’s slowdown and reform agenda while underscoring that other parts of Asia – such as India – are still growing strongly. Interview by Stefania Palma.

India's public sector banks remain the weakest link in the country's banking industry. How are the central bank's repo rate cut and the government's capital infusions affecting these lenders?

With state funding on the decline, and new technologies and more stringent regulation both increasing, the Indian banking sector is undergoing a significant period of change. New players are entering the market, making it even more difficult for the state-owned banks, which are already struggling with deteriorating asset quality and incoming capital adequacy targets.

The Indian government may be keen for consolidation in the banking sector – driven by a desire to see the country's lenders figure among the world's largest banks – but internal resistance to such changes, from bank employees and their unions in particular, continue to thwart such activity. On top of this, India's lenders are struggling with non-performing assets, which has proved a blight on their profits over the past 12 months.  

In the recent past, Bombay Stock Exchange has achieved considerable growth both in terms of the volume and diversification of its listings. But, according to its president and CEO, Ashish Kumar Chauhan, the exchange still has a long way to go.