This paper examines the spread of banking as part of infrastructural growth of the Indian economy. Spread means geographical spread across states, between rural and urban areas, across class of borrowers and industries. It is important to evaluate whether the objective of financial inclusion in some sense is being met. How the Indian banking sector is perceived by the market and whether there has been a change in this perception is also examined. The Indian banking sector may be pursuing its own real objectives and may be achieving a lot. The question is: Does the stock market also feel so?

Infrastructure development of a country encompasses the development of physical, social and financial infrastructure. Physical infrastructure includes roads, ports, railways, power, telecommunication, bridges and irrigation projects. Social infrastructure includes educational institutions, health centers, sanitation, sewerage, drinking water facilities and parks. Financial infrastructure includes the banking sector, NBFCs, insurance companies, mutual funds, developed stock exchanges and the presence of a strong regulatory framework. This paper focuses on one of the aspects of financial infrastructurebanking sector. Bhandari et al., 2009; Datta Chaudhuri, 2007a; 2007b; 2007c; 2008; and 2009, in the past have examined the profitability of banks, their financial performance, their overall risk taking ability, revealed comparative advantage and magnitude and management of NPAs. This paper examines the spread of banking as part of infrastructural growth of the Indian economy.

The banking sector in India consists of the State Bank of India and its subsidiaries, nationalized banks, banks in the private sector (classified as other scheduled commercial banks in CMIE), foreign banks, cooperative banks and regional rural banks. This paper examines the growth of commercial banking in India, an important part of India's financial infrastructure, of both deposits and advances starting from 2001-02. The objective is twofold. First, we try to assess the extent of spread of banking in Indiageographical spread across states, between rural and urban areas, across class of borrowers and industries, which is important to evaluate whether the objective of financial inclusion in some sense is being met. Second, we will examine how the Indian banking sector is perceived by the market and whether there has been a change in this perception.

Infrastructure Journal, Financial Infrastructure, Market Perception, Indian Economy, Indian Banking Sector, Infrastructure Development, Irrigation Projects, Social Infrastructure, Insurance Companies, Banking Sector, Commercial Banks.