The Hindu Business Line : `WTO norms spell gains for Indian banks'

THE Managing Director and Chief Executive Officer of the Credit Rating Information Services of India Ltd (Crisil), Mr R. Ravimohan, has said that WTO norms have opened up lot of opportunities for Indian banking system.

He was delivering the valedictory address at the national seminar on "WTO and banking sector in India" organised by the Corporation Bank Chair in Bank Management of Mangalore University in Mangalore on Tuesday.

Referring to the decision of the Government to allow foreign direct investment (FDI) in private banks, he stated that 74 per cent FDI in this sector was much more than what is binding under the WTO norms.

Though there was a large amount of FDI in automobile sectors in the country in the past few years, the share of banks was "next to none", he said.

The nation was in the threshold of second round of large-scale investments in such sectors, he said, and urged the banks to seek their share in such investment plans.

Advocating consortium partnership with foreign banks, Mr Ravimohan asked banks to have tie-ups with them.

In future, banking activities would be concentrated around major foreign banks, niche banks, and community-based banks, he added.

The Executive Director of Corporation Bank, Mr P.K. Gupta, stated that Indian banks should have global presence. Stating that WTO norms had positive impact on the banking system, he pointed out that the quality of assets had improved considerably.

Gross NPA of public sector banks, which was 23.2 per cent during 1992-93, was 9.4 per cent in 2002-03. Better disclosure norms have helped in bringing transparency in bank activities.

Mr Gupta stated that banks could consider investment and lending in areas such as infrastructure, education, tourism, entertainment, and health services.