Understanding A to Z of Banking in India

I always wait for this report from RBI – The report on Currency and Finance. The previous one was on India’s financial markets. The previous report was for the year 2005-06 and has been a while waiting for the new report.

 The latest report is focused on Banking sector in India and is for the year 2006-08. It is a very detailed report on India’s banking sector across time zones- past, current and future. The theme says:

The Report undertakes an in-depth analysis of the various aspects of Indian banking such as management of resource mobilisation; management of risk and capital, lending and investment operations of banks; financial inclusion; consolidation and competition; efficiency, productivity and soundness; and regulatory and supervisory challenges.

The thrust of the Report is to critically examine the various issues and, going forward, what further needs to be done to ensure the growth of the banking sector in a way that supports/accelerates India’s current growth momentum and enhances the stability of the financial system. Various measures suggested in this Report set out only the broad direction in which reforms in the banking sector could move in future. The pace and sequencing of measures would need to be calibrated keeping in view the degree of comfort in moving forward in a credible way.

The report has already been covered well in the press. What I found more interesting was this study by RBI which says Public sector Banks on an average are more efficient than foreign banks! It has a very detailed chapter on financial inclusion and other aspects of banking.

Happy reading

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