Banking and Finance


`Banking on prudential reforms' -- Mr V. Leeladhar, CMD, Union Bank of India
REFLECTING over a decade of reforms in the banking industry, Mr V. Leeladhar, Chairman and Managing Director, Union Bank of India, feels that the most significant steps forward has been the laying down of prudential norms for bankers. Emphasising the imp ortant role uniform guidelines have played in such areas as NPAs, provisioning, etc., in creating a level playing field for banks, and speaking on a range of banking issues, including sub-PLR and autonomy for banks, the soft-spoken Mr Leeladhar caps the last ten years in an interview with Business Line.

Too much emphasis on capital adequacy?
AMONG the more significant measures that came under banking sector reforms is the linkage of a bank's capital to its risk-weighted assets, better known as the capital adequacy ratio norm. The Reserve Bank of India has made it clear that it intends to rai se the Capital to Risk-weighted Assets Ratio (CRAR), from the present eight per cent of total advances to 12 per cent, in gradual steps.

Evolution of the debt market -- A long, but rapid journey
TILL 1991, money was collected and lent according to Plan. If planning went awry, the government sent word to its banker. The central bank made a few phone calls to the heads of banks and bonds were issued and the money arranged. No questions asked, no e xplanations given. If anybody wanted a loan, they approached the banks to borrow money at fixed rates. That, in short, was the debt market in India ten years ago.

Economy
How China has surged ahead of India
AFTER 15 years of hard work and tough bargaining, China has become a full member of the World Trade Organisation (WTO) at the recent Doha Ministerial Meet. As part of the conditions for WTO entry, China has agreed to open up a number of industries, inclu ding telecommunications, banking, automobiles, energy, insurance and retailing, over the next few years. What are the implications for India of Chinas long-awaited entry into the WTO?

Ambiguous economics
THE world has long fallen for the claims of economists to the status of a science for their somewhat nebulous field. So much so, the central bank of Sweden brought itself round to make good the arguably justified omission of a prize for economics in Alfr ed Nobel's will by instituting one under its own auspices to be announced and awarded along with the Nobel prizes. Over a period, it has also acquired a backdoor legitimacy as yet another Nobel prize which, in the strict sense of the word, it is not.

FDI: Putting it in perspective
There is a constant refrain in many quarters that India has not seen adequate FDI inflows, despite a decade of liberalisation, to an extent comparable with China, Brazil or even Malayasia. We examine here alternative theories of FDI to arrive at an eclec tic perspective.

Editorial
Eyeing the reserves
THE KEEN DESIRE of the Government to strip Videsh Sanchar Nigam (VSNL) of its huge hoard of cash reserves seems to be influenced by two concerns. One, the prospective acquirer of a strategic stake in the company would gain control over resources that can be potentially misused. Two, the political criticism that would inevitably arise if the strategic stakeholder were to get this hoard for buying just 26 per cent of the stake. Given the charged political atmosphere, such a controversy is something the Go vernment could well do without.

Foreign Trade
Emerging economic challenges to diplomacy
EVEN as the entire nation remained glued to television sets watching the Taliban collapse under sustained American bombings and onslaughts of the Northern Alliance, important developments were taking place that are going to seriously affect not only our economic development, but also our role and influence in our neighbourhood and in the world. The ASEAN recently announced that it would be concluding a Free Trade Agreement with China within the next decade. It also decided to upgrade its relations with India to one involving regular annual summits.

Miscellaneous
Politician's freedoms
AS I am quite seriously thinking of becoming a politician, I thought I should consult my old pal, Gulabjamun-ji. GJ, as he is known among his chamchas, is a veteran politician. He is been in and out of power so often that he cannot remember whether he i s in power or not at any point in time. Power, as he once said, is a revolving door for opportunists. You grab what you can before you revolve out. GJ has guided many young politicians to the pinnacle of power before they fell with a crash.

Page One | Index | Home