IBA chief favours debate on PSB consolidation issue

Mumbai, Nov 28 | Updated: Nov 29 2004, 05:30am hrs
Chairman of the Indian Banks Association (IBA), PS Shenoy, has called for a debate on the policy issue of consolidation among public sector banks (PSBs) even as he underscored the importance of keeping in mind the interests of the economy in general and all stakeholders in particular in this regard.

Ours is a democratic country and we should be open to new ideas. We cannot resist change. In a globalised environment, survival is possible only through aggressive cost-cutting, brand management and continuous innovation. Quick adaptability to the changing scenario alone would ensure survival and not just the size or financial strength, said Mr Shenoy at the triennial general council of the All India Bank Officers Confederation (AIBOC).

The IBA chief observed that in order to attract foreign investment and to make our domestic manufacturing and service units globally competitive, the government has no option but to open up further at a measured pace.

For public sector units, the government is not in a position to infuse the required capital. Therefore, further opening up of the economy to attract international capital assumes particular significance for India. Compared to other developing countries, the domestic savings rate in India is also quite low and hence not enough to finance the growing investment requirements, said Mr Shenoy, who is also chairman and managing director of Bank of Baroda.