Mumbai, Nov 21: India needs to lift the ceiling on foreign investments in banks and expedite disinvestment of state-owned financial sector entities to attract higher overseas investment, Britain's chief secretary to treasury Paul Boateng said today. Seeking a speedy liberalisation of Indian financial sector, Boateng said "the challenge for the Indian government, the Reserve Bank of India and industry here is to embrace the reality of increasingly integrated global markets and release the potential inherent in Indian banks, insurance companies and securities houses".
The General Agreement on Trade in Services (GATS) negotiations under WTO's Doha agenda would provide a framework for liberalisation, he said while addressing a "banking and finance summit", organised by Tata consultancy services here.
Political, trade and investment links between the two countries are flourishing and "now is the time to take the next step (liberalise financial sector) to sustain high growth across the rest of the economy", he added.
"UK-based banks, fund managers and insurance sector players are eager to bring their international expertise to help take Indian market to the next stage", Boetang said.
As India strives to sustain eight per cent growth and reduce poverty ratio by 15 per cent by 2012, the way forward was through domestic reform to create the right climate for an international industry, Boetang said.
A more efficient industry drives growth across all other areas of the economy, lowering the cost of capital for business, he added. Bureau Report