Considering the exponential growth of the banking sector in the country, India needs three to four large banks, says Rakesh Bhatiya, Managing Director and Chief Executive Officer, Catholic Syrian Bank.
He said the country’s largest bank — State Bank of India — has no place among the 50 largest banks in the world. At the same time, three Chinese banks find a place among the 10 most valuable banks globally, he said while speaking on the subject Banking Scenario organised by the Bankers’ Club, Greater Kochi here.
However, he felt small banks focusing on the local community also have a place. Even in the US, small banks run successfully on the planks of community banking and loyalty banking.
The RBI move to provide licences to new banks could not be interpreted as contradictory to the consolidation of banks. Adding new blood may bring new ideas and better technology. Large organisations with long experience in the financial sector could add value to the sector, he said.
According to Bhatiya, strict regulations adopted by the US regulators after the banking sector collapse there in 2008 proved harmful to banks world over. All the banks are now following the US standards. These regulations are difficult and costly.
Ups and down in the banking sector are not new. However, the risking level of NPA has been a problem, he said.
The Club President Peter Sebastian, Secretary K.U. Balakrishnan and Treasurer Jacob M. John also spoke.