Indian banking industry is expected to witness consistent roll out of innovative banking models like payments and small finance banks. There will be 11 payment banks, 10 small finance banks which are expected to be launched in FY17. Meanwhile, country’s banking sector is these days passing through a critical phase due to abnormal rise in NPAs and declining asset quality. State owned banks like Bank of Baroda, State Bank of India, Punjab National Bank took a major cut in the income statement by increasing provisions for NPAs due to which their net profitability was affected.This has led to consolidation in banking space with SBI recently announcing merger with its subsidiaries and another smaller bank. We see that the sector will further consolidate.