The Hindu Business Line : ‘Effective asset-liability management vital’

Kolkata, Dec.12 Giving the finance industry perspective from a lender’s point of view, Mr T.S. Bhattacharya, Managing Director of State Bank of India, said here on Wednesday that banks perforce now need to cover the cost of funds and yet remain competitive, particularly when they have to bear the burden of (cross-subsidised) social sector funding, as mandated.

Speaking at a workshop on ‘Knowledge sharing platform for new age finance’, organised by CII, eastern region, Mr Bhattacharya emphasised that effective asset-liability management is of critical importance.

Re appreciation

Stating that rupee appreciation has virtually dried up the FCNR route, he felt that not having a strong home currency too was a problem.

Admitting banks do need to be choosy; Mr Bhattacharya said industry needs to think of different ways of raising money, especially in the short and medium-term, given the scenario of interest rates unlikely to come down in the near future.

While the large banks, whether PSU or private, need to be adequately capitalised and Basel – II compliant, the small banks too have an important role to play, he said.

West Bengal challenges

Mr Pradeep Udhas, Head, Markets, KPMG (Knowledge Partner), outlined the challenges faced by West Bengal as highlighted by the KPMG-CII Report on “Sustainable economic development in West Bengal – A Perspective”, released here.

Mr Udhas said that West Bengal, despite many positives, has slipped to 10th position in terms of per capita income.

The income levels of persons dependent on agriculture in the State, according to the Report, was low and likely to reduce further with the increase in population dependent on the same quantum of land.

Stressing on self-belief, Mr M.V.Rao, WBIDC, said the recent talks with Jurong Town Corporation of Singapore, for evolving a suitable model of development for Nayachar Island (the proposed new site of the chemicals hub) have been encouraging. A 60-million tonne refinery has come up successfully at Jurong Island. Opportunities for financing of infrastructure in the State, according to him, were immense.

Mr Sumanta Chaudhuri, CEO of West Bengal Industrial Infrastructure Development Corporation, said the earlier philosophy pertaining to development of industrial parks which came up with 100 per cent government assistance has now given way to the public-private partnership model. “Along with industrial development, we also need to develop social infrastructure like hospitals, housing etc, and the model project being developed by WBIDC in collaboration with a private entity in 200 acres of land at Shantiniketan is one such model project.”