New banks need to attune with national priorities: FM

Sep 18 2011, 02:54 IST
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SummaryWith just 40% of India’s population having bank accounts, finance minister Pranab Mukherjee on Saturday exhorted banks to do more for financial inclusion.

With just 40% of India’s population having bank accounts, finance minister Pranab Mukherjee on Saturday exhorted banks to do more for financial inclusion. Speaking at the FE Best Banks Awards ceremony, Mukherjee said he expected “the new banks which are going to come would be in a position to effectively compete with existing players and attune themselves with national priorities”. This, the finance minister said, included government schemes for mandated lending, priority sector lending and on financial inclusion.

While coaxing banks to continue to strive for further excellence, Mukherjee said the most important aspect of the FE Best Banks Awards event, now in its 15th year, was that it set benchmarks for others to try and live up to it. Recognising the role played by public sector banks, which account for nearly three-fourths of bank lending, the FM said in the last quarter there had been a 10-20% growth in the topline of banks and a profit growth of more than 25%.

Referring to the crisis in global banking, the FM said this highlighted the need to take a serious look at the fragmented regulatory system in global financial markets. Giving the Indian regulatory system a pat on its back, he said Indian banks continued their robust growth while not compromising on asset quality. “The issue of financial stability and the banking system,” the FM said, “have now become an integral part of policy discussions and macro-economic objectives in the developed and the developing world.” It is, he said, “a testimony to our consistent view that reforms in global standards have to be adapted to local conditions.”

All the FE Best Bank Awards winners honoured on Saturday, in a glittering function which was attended by Maharashtra chief minister Prithviraj Chavan and deputy chief minister Ajit Pawar, have exemplified one or the other of the qualities, the finance minister highlighted. HDFC vice-chairman and CEO Keki Mistry won the Banker of the Year award. Receiving the award from the finance minister, Mistry said, “This is truly an honour for HDFC and it would not have been possible without the hard work and commitment of all our employees and I dedicate this award to them.”

The Lifetime Achievement award went to PJ Nayak, who took Axis Bank to the third-largest private sector bank in the country within a short span of nine years. A former bureaucrat, Nayak transformed the bank into a robust, well-capitalised organisation with a

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