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Mr V. Leeladhar, Deputy Governor, Reserve Bank of India (right) launched SynBillpay through Internet banking in Bangalore on Thursday. Mr N. Kantha Kumar, Chairman and Managing Director, Syndicate Bank, and Ms Devaki Muthukrishanan, Regional Director, RBI, are to his right. — G.R.N. Somashekar

Bangalore , June 9

GOVERNMENT bond prices would not be affected despite the restricted participation by banks in the dated securities auctions, according to Mr V. Leeladhar, Deputy Governor of the Reserve Bank of India.

Speaking to presspersons after an Indian Banks Association-sponsored conclave, he said, "This is not an issue as all the securities at the auctions are fully subscribed." He added that markets were surfeit with liquidity. Earlier speaking at the conclave, Mr Leeladhar said the RBI had worked out guidelines for business process re-engineering for the banking system. This would shortly be put in the public domain for feedback from banks and service providers, he added.

Mr Leeladhar said that banks should be prepared for a competitive regime, particularly from financing schemes provided by vendors of consumer durables. Such schemes, he said, would result in lower offtake of short-term credit from banks.

Mr Leeladhar said banks would also have to work towards bridging the digital divide, in making credit available to the rural regions. He added that most of the facilities now being offered by the banking sector had a distinct urban bias.

He said the banks must to reach out to the rural regions for making these facilities available.

However, to achieve this, he said, banks would have to re-orient their internal procedures and processes. For this purpose banks would have to begin the business process re-engineering, he added.

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