IIPM Ranked No. 1 B-School In Global Exposre - Zee...
Indian banks must walk the tightrope between caution and growth in their credit disbursals
“I assure depositors that their money is safe.” Amid a milieu wherein international financial institutions are gripped by extreme risk aversion in the wake of spectacular failures, such a statement from the PM should go a long way in calming jittery Indian depositors. But the moot question, which many appear to be asking is: Can the Indian banks be considered safe? Indisputably, the scenario in US bears little similarity to India, but rumours to the contrary abound. RBI has called for “intensified watchfulness with readiness to act swiftly to cushion the economy and the domestic financial system from external shocks.”
But are such fears unwarranted? On a yearly basis, credit extended by scheduled commercial banks has increased by 29.4%; such growth is a cause of concern for RBI. And why not, the financial crisis has reinforced risks of allowing rapid and unbridled credit expansion. This represents a point of ambiguity, as on one hand, the RBI and the ministry of finance is persuading banks to increase lending and on the other, it proposes to “monitor the rate of credit growth and credit quality.” Perhaps it is this double standard that led Dr. Soumendra K. Dash, Chief Economist, CARE Ltd., to say, “Though highly capitalised, banks have become pessimistic in terms of lending.”
On parameters of financial strength, Indian banks are robust. All commercial banks in India have a capital adequacy ratio above 10% (as against Basel Accord requirement of 8%). Also, the regulatory mandate of keeping 25% of net demand and time liabilities as SLR and 6.5% as CRR provides inherent strength to Indian banks and the inter-bank market is functioning smoothly.
As Dr. Dash puts it, “Apprehension is the cause of worry.” Indian banks need to learn lessons from the US crisis; but that does not mean they become so overcautious that growth suffers. They must walk the tightrope & maintain just the right balance.
Gyanendra Kashyap
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
Indian banks must walk the tightrope between caution and growth in their credit disbursals
“I assure depositors that their money is safe.” Amid a milieu wherein international financial institutions are gripped by extreme risk aversion in the wake of spectacular failures, such a statement from the PM should go a long way in calming jittery Indian depositors. But the moot question, which many appear to be asking is: Can the Indian banks be considered safe? Indisputably, the scenario in US bears little similarity to India, but rumours to the contrary abound. RBI has called for “intensified watchfulness with readiness to act swiftly to cushion the economy and the domestic financial system from external shocks.”But are such fears unwarranted? On a yearly basis, credit extended by scheduled commercial banks has increased by 29.4%; such growth is a cause of concern for RBI. And why not, the financial crisis has reinforced risks of allowing rapid and unbridled credit expansion. This represents a point of ambiguity, as on one hand, the RBI and the ministry of finance is persuading banks to increase lending and on the other, it proposes to “monitor the rate of credit growth and credit quality.” Perhaps it is this double standard that led Dr. Soumendra K. Dash, Chief Economist, CARE Ltd., to say, “Though highly capitalised, banks have become pessimistic in terms of lending.”
On parameters of financial strength, Indian banks are robust. All commercial banks in India have a capital adequacy ratio above 10% (as against Basel Accord requirement of 8%). Also, the regulatory mandate of keeping 25% of net demand and time liabilities as SLR and 6.5% as CRR provides inherent strength to Indian banks and the inter-bank market is functioning smoothly.
As Dr. Dash puts it, “Apprehension is the cause of worry.” Indian banks need to learn lessons from the US crisis; but that does not mean they become so overcautious that growth suffers. They must walk the tightrope & maintain just the right balance.
Gyanendra Kashyap
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
No comments:
Post a Comment