The issue of granting licenses to new banks caused many to raise their eyebrows in last few years. Questions were being asked by authentic experts, bankers and people about the wisdom of allowing more banks, a sector that had been struggling hard to cope with the versatile problems over the years. The impact of inclusion of more new commercial banks on banking sector has been the focus of considerable scholarly effort during the last few years. Only a few studies have approached the impact of structure on bank performance directly by investigating the question: what has happened to bank performance in communities where the structure of the market has been altered? This paper examines the necessity of the entry of new private commercial banks .To achieve this objective, researchers systematically looked at the sector’s current state and future premises through industry analysis. The results indicate that allowing more banks would distort the market, which is already saturated with more than 50 banks in operation.