The Hindu Business Line : `Indian banks turning more efficient'

THE Executive Director of Reserve Bank of India, Ms Shyamala Gopinath, has said there has been a discernible improvement in the efficiency of Indian banks since 1992.

She was delivering the keynote address at the national seminar on "WTO and banking sector in India" organised by the Corporation Bank Chair in Bank Management at Mangalore University on Monday.

Though foreign banks have been operating in India through branches for long, Indian banks continued to maintain a dominant share in the banking market, she said.

As on January 24, 34 foreign banks from 21 countries operated in India. As on March 31, 2003, the market share of State Bank of India and associates was 29.3 per cent, nationalised banks 46 per cent and private banks 17.4 per cent.

She said the market share of foreign banks was 7.3 per cent till that date.

Ms Gopinath said the increasing trend in efficiency had been fairly uniform irrespective of the ownership pattern. However, she agreed that there was scope for further improvements in efficiency gains.

On the interest shown by Indian banks to mark their presence in other countries, she said 10 Indian banks had 93 branches, 16 subsidiaries, five joint ventures and 18 representative offices in 24 countries. Some Indian banks had plans to set up representative offices or branches abroad, she said.

Referring to the technological upgradation in Indian banking sector, she said several Indian banks including public sector ones are transforming themselves into technology-savvy institutions.

This will make banking market highly competitive.

"They can deal with volumes at lower costs and increase the range of delivery channels, including Internet banking," she said.

In her concluding remarks, she said sound macroeconomic policies, strong domestic institutions, and good governance would make Indian institutions global and enable them to meet the challenges of globalisation.