Resources for Basel II Capital Accord (Basel II)

Banks told to bulk up through M&As

www.financialexpress.com

The finance ministry on Monday underscored the need for Indian banks to look at inorganic growth and consolidation to compete with large global banks and build efficiencies in the run up to the 2009 Basel-II regime.

The ministry and the Reserve Bank of India (RBI) are also continuously exploring measures to facilitate capital raising by banks, especially public sector banks (PSBs), to enable them to be stronger in the new global banking environment, post-Basel-II.

Delivering his inaugural address at Bancon 2007, the annual bankers’ conference, on the theme “Indian Banking: Towards Global Best Practices” hosted by Bank of Baroda in association with the Indian Banks’ Association (IBA), minister of state for finance Pawan Kumar Bansal said there was rich empirical evidence to indicate that inorganic growth is one of the best ways to compete with large global banks. “This facilitates banks to expand their geographic reach and product portfolios and helps in risk diversification,” Bansal pointed out.

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