NEW DELHI: A day after executive introduced an enormous Rs 2.11 lakh crore capital fortify initiative, Chief Economic Adviser Arvind Subramanian on Wednesday made a case for consolidation within the banking area pronouncing the rustic preferably must have Five-7 massive lenders.
In a super banking international of day after today, India must have each massive public sector and personal sector banks, competing domestically and being aggressive across the world, he said in a lecture.
Citing instance of China, he said, there are 4 big banks which are now amongst greatest in the world.
"The big question also going forward is should there be more majority private sector ownership in the banking system? What is a good banking structure for India 5-10 years from now and...basically India needs...we need about 5,6,7 reasonably big banks both public and private sector and to be able to compete domestically and to be competitive intentionally," he said.
Quoting former RBI Governor Y V Reddy, Subramanian said the purpose should be to shrink or narrow the scope of the unviable banks.
Talking concerning the recapitalisation, he said it should be selective and incentive based, directing it to these banks the place the financial institution for greenback with regards to new credit creation shall be most.
"Since all banks must maintain a minimum capital adequacy, one possibility would be to recapitalise the unviable banks only to the extent necessary to finance their current balance sheet size while explicitly not providing for their growth," he said.
Yesterday, Finance Minister Arun Jaitley unveiled an extraordinary Rs 2.11 lakh crore two-year street map to reinforce NPA-hit public sector banks, which incorporates re-capitalisation bonds, budgetary fortify, and equity dilution.
Such bonds were first presented through the federal government within the 1990s to recapitalise PSU banks.
Responding to a question at the Goods and Services Tax (GST), Subramanian said there is a robust desire for having low charges, few slabs and put as many merchandise in and go away few merchandise out.
"Finance Minister also said that we need to move towards rationalising it and I am very encouraged that over the last month or so and going forward the GST Council will take up this matter and over time reduce the rate," he said.
He also expressed hope that finally each charges and slabs would come down.
"Ideally we should have one rate like Singapore does but even if we get down to two plus luxury goods or demerit goods, I think that would not be a bad outcome at all...I think we will get there sooner rather than later," he said.
To a question on Direct Tax Code, he said the federal government could be having a look at it at some stage.
On emphasis on digital bills, he said it might result in formalisation of the economic system.
In a super banking international of day after today, India must have each massive public sector and personal sector banks, competing domestically and being aggressive across the world, he said in a lecture.
Citing instance of China, he said, there are 4 big banks which are now amongst greatest in the world.
"The big question also going forward is should there be more majority private sector ownership in the banking system? What is a good banking structure for India 5-10 years from now and...basically India needs...we need about 5,6,7 reasonably big banks both public and private sector and to be able to compete domestically and to be competitive intentionally," he said.
Quoting former RBI Governor Y V Reddy, Subramanian said the purpose should be to shrink or narrow the scope of the unviable banks.
Talking concerning the recapitalisation, he said it should be selective and incentive based, directing it to these banks the place the financial institution for greenback with regards to new credit creation shall be most.
"Since all banks must maintain a minimum capital adequacy, one possibility would be to recapitalise the unviable banks only to the extent necessary to finance their current balance sheet size while explicitly not providing for their growth," he said.
Yesterday, Finance Minister Arun Jaitley unveiled an extraordinary Rs 2.11 lakh crore two-year street map to reinforce NPA-hit public sector banks, which incorporates re-capitalisation bonds, budgetary fortify, and equity dilution.
Such bonds were first presented through the federal government within the 1990s to recapitalise PSU banks.
Responding to a question at the Goods and Services Tax (GST), Subramanian said there is a robust desire for having low charges, few slabs and put as many merchandise in and go away few merchandise out.
"Finance Minister also said that we need to move towards rationalising it and I am very encouraged that over the last month or so and going forward the GST Council will take up this matter and over time reduce the rate," he said.
He also expressed hope that finally each charges and slabs would come down.
"Ideally we should have one rate like Singapore does but even if we get down to two plus luxury goods or demerit goods, I think that would not be a bad outcome at all...I think we will get there sooner rather than later," he said.
To a question on Direct Tax Code, he said the federal government could be having a look at it at some stage.
On emphasis on digital bills, he said it might result in formalisation of the economic system.
India should have 5-7 large banks ideally: Chief Economic Adviser
![India should have 5-7 large banks ideally: Chief Economic Adviser]()
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October 25, 2017
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