HYDERABAD: M. Narasimham, who headed two committees on banking sector reforms, has said consolidation of public sector banks is needed, but merger should not be forced. Rather, they should be based on synergies. He was addressing a seminar on `banking sector reforms-looking ahead' organised by the Indian Institute of Economics and Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPPCI) here on Saturday.

Mr. Narasimham, Chairman of Administrative Staff College of India (ASCI), felt that the recommendation of the 1991 committee of having two-three banks of international size, 9 or 10 national level and the remainder large regional/local banks still has relevance. He felt reforms had not addressed seriously enough.

Mr. Narasimham felt: "we need to take a balanced view of Foreign Direct Investment (FDI) in private banks." Instead of debating on the extent of FDI, focus should be on what foreign investors can bring by way of resources, technology and management and access to international market.

As a general rule, organic growth of foreign banks in India through branches would be preferable to inorganic growth in the form of acquisitions of existing private sector banks.

Coming to cooperative credit structure, he felt their regulatory function should be vested with Reserve Bank of India (RBI). Duality of regulatory authority between RBI and State Governments gave scope for `regulatory arbitrage', he said.

Subsidies

The Chief Secretary, Mohan Kanda, said issues like which areas, regions and sections of people had not benefited by reforms need to be looked into. On subsidies, he said banks should play a role in directing subsidies to the right hands.

Printer friendly page  
Send this article to Friends by E-Mail

Andhra Pradesh

News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Business | Sport | Miscellaneous | Engagements |
Advts: Classifieds | Employment | Obituary | Updates: Breaking News |