Many people in India operate under the same principles, small privately owned and financed businesses. However, the big banks do indeed deal with the major corporations. At this point of time, the reserve bank of India has published a report stating that the failure of ONE major corporation will prove catastrophic for our economy. [1] Sounds absolutely crazy but it seems to be true.
This is because banks have over extended credit (once more ?) and maintain very low liquidity. If one of their debtors defaults, the bank will be finished, thereby unleashing a domino effect on their creditors and debtors.. crash and burn. Add to this, the fact that the country runs on a major current account deficit (export/import imbalance) means that the government will not be able to do any massive bailouts. The foreign exchange reserves in the country are still small. Which means, we can't print more currency to hack our way out of the problem either because we'll see hyperinflation in a very bad way.
Of course, the regular joe here will be able to find a way to continue running his business because he may not have a big relationship with a big bank. But macroscopic factors like big banks failing and the economy collapsing will hit him and everyone else hard as well. There will be massive layoffs for folks who work in big corporations and while in absolute percentages of population this may not look like much, it'll still impact a few hundred million people easily in a country like India.
TLDR; Banks in India need to be reigned in, otherwise things are going to get very ugly sometime soon.
[1] - http://www.moneycontrol.com/news/economy/rbis-financial-stab...