Rakesh Bhatiya, managing director and Chief Executive Officer of Catholic Syrian Bank has said that considering the exponential growth of banking sector in India, the country needs three to four larger banks.
Speaking on ‘Banking scenario’, at the Bankers’ Club Greater Kochi here, he pointed out that India’s largest bank, SBI has no place among the 50 largest banks in the world. At the same time, three Chinese banks have found place among the 10 most valuable banks, globally, he said.
He was of the view that small-scale banks, focusing on the local communities also have an important space in the current scenario. Even in the US, small banks are running successfully on the planks of community banking and loyalty banking.
The RBI’s move to issue licences to new banks cannot be interpreted as contradictory to the consolidation of banks. Adding new blood may bring new ideas and better technology. Large organisations with long-term experience in the financial sector can add value to the sector, he said. He opined that strict regulations adopted by the US regulators after the banking sector collapsed there in 2008 were proved harmful to the banks across the world.
All banks are following the US standards. These regulations are difficult and costly to be followed, he pointed out.
“It is a challenging situation for all of us. Economic scenario of the country may improve post coming general elections. Fluctuations in banking sector are not new. Increasing the NPA level has been a problem.
But the NPA-centred credit policy may be proved harmful to the economic development, Bhatiya added. Club president Peter Sebastian, secretary K U Balakrishnan and treasurer Jacob M John also spoke.