New Delhi: Industry body Assocham on Monday
called for consolidation in the Indian banking sector without
any delay to enhance global competitiveness, despite dithering
of RBI on the issues.
According to study the size of Indian banks in terms of
their assets is very small to make optimal use of their
capacities for raising funds at globally competitive rates.
The balance sheets of top 10 Indian banks suggest the
greater scope of consolidation to reap the benefits of large
sized globally competitive Indian banks, it said.
The banks are not able to compete globally in terms of
fund mobilisation, credit disbursal, investment and rendering
of financial services as they are hampered by the fragmented
nature of the banking industry.
"Therefore, consolidation to certain degree is highly
warranted to ensure substantial increase in assets base of
Indian banking system, besides enhancing their global
competitiveness," Assocham President Swati Piramal said.
Dispelling apprehension about the likelihood of a big
bank failure in India, the study states that the size of
Indian banks is relatively very small as the combined assets
of top ten banks constitute less than 60 percent of the GDP.
Unlike, the banking system of European economies, where
even after the global financial turmoil assets of only top
five banks has grown to four times of GDP.
PTI
First Published: Monday, December 14, 2009, 21:15