The Hindu Business Line : `Banks may tap FDI for Basel II needs'

BANKS in India may explore Foreign Direct Investment route to raise funds for meeting the Basel-II norms, said Ms Naina Lal Kidwai, Deputy Chief Executive Officer, HSBC Ltd.

Speaking at the annual public lecture organised by the A.D. Shroff Memorial Trust, here on Thursday, Ms Kidwai said Indian banks would require around Rs 9,000-12,000 crore to be compliant with these norms.

She said banks could also raise funds from the domestic capital market through IPOs.

Referring to the emerging banking scenario, she said the banking sector was poised for big changes aided by factors such as technological changes, consolidation and rise in capital infusion.

Ms Kidwai said that technology was a boon to banks. "Customers can get cheaper and efficient service thanks to ATMs, phone and Internet banking," she said.

On the consolidation in the banking industry, Ms Kidwai said, "The challenge for the banking industry, in the next five years, is consolidation. Small private banks may merge with public sector banks. The Government too may adopt a commandeering role rather than a consultative role."

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