Financial Daily from THE HINDU group of publications
Tuesday, Oct 25, 2005
Financial Daily from THE HINDU group of publications Tuesday, Oct 25, 2005 |
|
|
|
|
|
|
|
Money & Banking
-
Public Sector Banks `Banks may need Rs 60,000 cr more capital' Chidambaram to convene meet of CMDs next month to discuss issue Our Bureau
Mr P. Chidambaram, Finance Minister, and with Mr S. C. Gupta, CMD, Punjab National Bank, at the inauguration of the Network Operation Centre of the bank in the Capital on Monday. - - Ramesh Sharma
New Delhi , Oct 24 THE Finance Minister, Mr P. Chidambaram, has said that Indian banks may have to raise Rs 60,000 crore capital in the next five years to support their likely growth of business based on an assumption of seven per cent annual GDP growth. "Banking capital has to be augmented every year. The additional capital formation has been estimated at Rs 8,000-9,000 crore annually. My own calculations suggest that an additional Rs 60,000 crore capital might be required by the banks over the next five years," Mr Chidambaram said while inaugurating the Network Operation Centre of Punjab National Bank (PNB). Since a large proportion of the additional capital requirement would be by public sector banks, the Finance Minister said that he would soon hold discussions with bank chiefs on the possible to ways raise such capital. "Sometime in November, I will convene a meeting of Chairmen and Managing Directors of public sector banks and ask them when and how they can raise such capital," Mr Chidambaram said. His calculations on the capital requirement are based on bank finance amounting to 30 per cent of the country's GDP of Rs 35 lakh crore and likely seven per cent annual growth of the economy. Banks are required to maintain a minimum capital adequacy ratio of nine per cent based on the risks calculated on the various segments of their lending portfolio. Complimenting PNB for its technology initiatives, Mr Chidambaram said that unless Indian public sector banks keep pace with the technological developments, they are at the risk of losing their competitive edge and their leadership position. "Banking is changing, customer profile is changing, and their expectations are changing. Unless our banks change according to the times, they will not be competitive and world-class. Technology is a critical factor in making our banking system world-class." The Finance Minister pointed out that even today there was a `wide variation' between the public sector banks on the level of adoption of technology. "The reasons why banks are lagging behind is perhaps because we are not giving them enough autonomy." Speaking on the occasion, the PNB Chairman and Managing Director, Mr S.C. Gupta, said that the Network Operation Centre, which will monitor the bank's network infrastructure, has been set up for prompt fault diagnosis and resolution. Mr Gupta said that from a total of 1,000 centralised banking solution (CBS) branches in March 2005, the bank currently has 1,446 such branches and hopes to take the number to 2,000 by end of the current fiscal.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
