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Unbridled innovation in financial products can be dangerous, according to Subir Gokarn, Deputy Governor, Reserve Bank. But this does not mean that innovation is not welcome, he said while taking part in a panel discussion at the Emerging Kerala-Global Connect 2012 event here on Friday.
STATE PLANS
Do not kill innovation, but also take care that it does not grow to a level where it begins to threaten the system, he advised the financial sector. Gokarn also pointed to the need for State Plans to build on a State’s inherent strengths and work up a long-term strategy for growth.
State Governments, he said, shouldponder over what stops them from pursuing this strategy. They should look at clearing barriers, if any, through policy intervention and creating enabling conditions. Finance becomes important here, but there is always a trade-off between risk and return. This calls for a fine balancing act to keep the financial and the real sectors on an even keel.
Shyam Srinivasan, Managing Director and CEO, Federal Bank, said banks need to tap Keralites based outside the State. Much in the lines of their brethren based overseas, they could prop up a ‘remittance economy’ of their own.
For banks, the Rs 2.5 lakh-worth project proposals being considered at the Emerging Kerala event and the project financing opportunities being thrown up are too big to miss.
INDIA GATEWAY
Uday Kotak, Executive Vice-Chairman and Managing Director, Kotak Mahindra Bank, said Kerala’s has what it takes to project itself as a gateway to India, much like Hong Kong is to China and Singapore to the Asean.
The State’s huge remittances can be leveraged to transform the Indian economy as a whole, he said during a panel discussion at the event.
> vinson.kurian@thehindu.co.in
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