Fintech leading India's banking revolution but it's hampered by old rules

The country's licensing policy for financial institutions is past its sell-by date. Innovative solutions are out there but require regulation.

No deposit-taking institution in the world is trusted more by savers and enjoys bigger cachet with investors than HDFC Bank Ltd. What this plenitude has done to India’s most valuable lender is make it so lethargic — literally, with its digital services suffering repeated tech outages — that it had to be banned from issuing new credit cards for eight months. But a regulatory slap on the wrist is no durable solution. Bank licenses are permits to make money out of thin air. The prospect of sharing the privilege with a new breed of digital rivals will be more effective