There are several chracteristics that make retail banks different from finance
companies. Evidently the fact that retail banks will be allowed to accept public
deposits and need not be restricted to raising funds via promissory notes like finance
companies falls under this category. But more importantly, authorities have developed
clear procedures and criteria for qualified retail banks to upgrade themselves to full
commercial bank status without being constrained by their existing license. Under this
situation, should a qualified retail bank decide to compete with commercial banks,
they will be allowed to do so on a level playing field.