Kalam lists priorities for country's banking sector

Kalam lists priorities for country's banking sector

Wednesday, 10 November 2004, 08:00 Hrs
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NEW DELHI: President A.P.J. Abdul Kalam Wednesday listed some priority areas for India's banking sector to help the country achieve an economic growth of seven-eight percent and push overall development.

Addressing the Bancon 2004 bankers' conference here, the president said India's financial sector must more than double credit to the farm sector and participate better in the nation's infrastructure development.

Farm credit in the country, particularly to promote agro-processing industries, must be raised to 2 trillion from the present level of 900 billion in three years, he told the conference organised by the Punjab National Bank.

The speakers included Finance Minister P. Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia, Reserve Bank Governor Y.V. Reddy and Deputy Managing Director of the International Monetary Fund Anne O. Krueger.

The Reserve Bank governor said among the world's top 1,000 banks, there were more banks from developed countries than from the developing countries.

The US alone had over 200 banks on the list, followed by Japan with just above 100, Germany 80, Spain 40 and Britain around 40.

"Even China has as many as 16 banks within the top 1,000, out of which as many as 14 are in the top 500. India, on the other hand, had 20 banks within the top 1,000, out of which only six were within the top 500," he said.

"This is perhaps reflective of differences in size of economies and of the financial sectors," Reddy told the conference titled 'Indian Banking: Realising Global Aspirations'.

The central bank governor also lauded the contribution of private sector banks in the country and said their performance had surpassed the branches of foreign banks.

"A noteworthy feature of banking reforms in India is the growth of newly licensed private sector banks, some of which have attained globally best standards in terms of technology, services and sophistication," he said.

In her address, the IMF deputy managing director told the conference that India had the potential to Sgrow at 10 percent in a sustained manner, much above the government's target of seven-eight percent.

"Given the right looks of policies, a growth of something like 10 percent is surely feasible for a number of years," Krueger said, adding: "India has the potential to do better."

According to her, the country's economic liberalisation programme since 1991 had brought substantial benefits to the economy and more would follow in the coming years when India integrated with the global economy.

She said a high growth rate was key to alleviating poverty and added that the financial sector had a crucial role to play in ensuring high growth rates.

Source: IANS
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