India’s banking sector needs to be opened up to consolidation to enable some players scale up to global size, Naina Lal Kidwai, India head of HSBC and the first woman to head apex industry body Federation of Indian Chambers of Commerce and Industry (Ficci) has said. Kidwai took over the leadership of the chamber on December 15.
In an interview to Business Line , she said, “We have many banks but none of them is of the scale that we need for an economy of our size and they are certainly not at a global level where we do not have even one bank in the top 50 So we need scale and, in fact, we need consolidation.”
Her remarks come at a time when corporates are upbeat over the Banking Bill making it through the Lok Sabha. This will enable the Reserve Bank of India issue new banking licences almost after a gap of nine years. Echoing the same sentiment, Kidwai said that new licences will be helpful because “competition brings better service, it will bring fresh money and capital.”
Talking about growth, Kidwai appreciated the Government’s renewed resolution on reforms. Formation of a Cabinet Committee on Investment and the effort to take pending Bills to their logical end have “changed sentiments and the markets went up, reflecting that confidence levels have moved up,” she said.
“I think we are all going to 2013 with a little bit of sprint, and are we going to make that sprint a marathon? This is the key,” she added.