Universal banking

Fragility of the banking system is the source of the recent economic crisis. It has become more and more a matter of public concern ... what kind of banks we should have. The fragility in the banking system is due to excessive exposure in short-term assets, stock markets and real estates. Should we retreat to normal banking functions? There has been a movement of "back to the basics"...Should we opt for specialised institutions or an integrated, harmonious and universal banking?Markets can be integrated but banks can become more specialised institutions....

Burgeoning NPAs

I recognise this is not a management problem. But this is an issue and we need to have a close look at it. It is always better to have an exaggerated view on NPA... That will help banks improve the situation.

Mergers of banks

This is a structural issue. We will take a decision on this over a period of time. I am in favour of leaving this to individual banks rather than issuing a mandate from the top. They should discuss it at the bilateral level and if there are enough synergies.... banks can go for it.

Giving autonomy to banks

Banks will be subjected to tough income recognition norms even as they are getting more freedom and autonomy. They will have to reach global standards...

South-East Asian meltdown

The crisis seems to be more persistent and deeper than what we thought six months ago. When we thought the crisis was over it started extending to Japan, Russia and evenLatin American countries are now being affected. This has become a global problem. The management of global economy is an issue. We need new instruments, new mechanism to tackle the problem.

Indian economy:

India is registering a high rate of growth, probably the highest in the world. We have adequate foreign exchange reserves and the currency markets are stable. We are confident that we can handle the crisis.

Transparency, accountability of the banking system:

The banks should opt for more disclosures... They should be subjected to stricter supervision. Bankers should be more accountable and the balancesheets more transparent. Analysts will scrutiny the balancesheets. Financially, we are a conservative nation. This is the least we can do.

Strengthening the supervisory regime:

The board of supervision of the RBI is doing a fine job... As we move towards global standards, the RBI inspection mechanism should be more effective.

The role of IBA:

New standard forsupervision should emerge from the IBA... In can also work an self regulatory organisation in the banking sector. The IBA should be the meeting point of bankers at all level.