The Hindu Business Line : ‘Stricter laws for banking sector will be based on need’

The Union Ministry of Finance will, if needed, introduce stricter laws for regulating the banking industry, the Union Finance Minister, Mr P. Chidambaram, said.

Addressing the media after inaugurating the Bank of India’s branch at Kothamangalam and Alankudi villages in Pudukottai district in Tamil Nadu on Saturday, Mr Chidambaram said that existing guidelines were “strong enough” for ensuring proper functioning of the banking industry. This was one of the factors for the sound functioning of the country’s banking sector, he said. However, if needed, the Union Finance Ministry will introduce stricter guidelines.

In reply to a question, he said that real estate would be one of the areas where stricter guidelines would be introduced, if required.

Strike ‘unwarranted’

Earlier, speaking at the function, Mr Chidambaram said that the proposed strike by the bank officials on September 24 was “unwarranted”. An agreement had been reached in 2004 for wages and a new agreement could be arrived at through talks, averting a strike, he said.

Mr Chidambaram praised the officials and staff of all banks in the country for implementing the debt waiver scheme of Rs 66,000 crore within a short deadline. “The bank officials worked overtime and I had inspected the waiver process at a few banks even at 10 p.m.,” he said, explaining the meticulous efforts of the bank managers in verifying various documents for ascertaining every farmer’s eligibility for a waiver. Bank of India had written off farm loans to the tune of Rs 1,004 crore.

Listing out the achievements of the United Progressive Alliance Government in extending educational loans to students and crop loans to farmers, Mr Chidambaram said that till March 31, educational loans for Rs 20,000 crore had been sanctioned to 12.5 lakh students. The target for farm loans this year was Rs 2.80 lakh crore against just Rs 83,000 crore sanctioned during 2003-04.

Pat to bank

He complimented the efforts of Bank of India in starting two branches in remote villages of Pudukottai district, realising the banking needs of the villagers.

The Union Minister of State for Environment and Forests, Mr S. Regupathy, said that the branch of a nationalised bank has been a need of the villagers for decades.

The Chairman and Managing Director of Bank of India, Mr T.S. Narayanasami, said that the bank’s business had crossed Rs 2,85,000 crore. “The current crisis being faced by foreign banks would not affect the banks in our country in general and the Bank of India in particular,” he said.