Reform, expand & lend: PM to banks

Referring to finance to farm sector, he said while banks have achieved higher growth in providing credit to agriculture and allied activities last year (2004-05), the momentum must be carried further.

“Credit for agriculture and allied activities is not a single market. Provision of credit for hi-tech agriculture is no different from credit to industry,’’ Singh said.

Observing that first phase of banking reforms is coming to a close, Singh said Indian financial system would grow in size and complexity and banks need to focus on organisational effectiveness.

Stressing the need for greater autonomy for public sector banks, Singh said banks needed more autonomy in management of staff and determining organisational structure.

‘‘Innovation and customer services are going to be key drivers of success in the future and the growth cannot be achieved without a strong, stable and an efficient financial system,’’ he said.

He added that special attention should be given to credit to small and marginal farmers and there was a need for relook at the organisational structure of rural branches, which must go beyond providing credit, and advise on agriculture-related matters as well.

Finance Minister P. Chidambaram said banks must transform themselves as multi-product financial centres and workers as multi-taskers to sell a range of products like insurance and pension schemes. He added that with proactive reforms, India would be able to achieve eight per cent growth, for which bank credit must expand.

Banks should have a presence, size and scale all over to finance India’s international trade which has grown by 24 per cent last fiscal. Lauding the SBI for its contribution to the Indian economy, he said the bank had the required strength to penetrate deep into rural India and grow internationally. “I look forward to the day when I find the name of SBI and its logo in every capital of the world,” he said.

Chidambaram said banks must acquire fresh capital to grow. “It (acquiring new capital) can only happen if we examine the current policies and restrictions and I hope we are able to do so in next few months,’’ he added.

He said banks must expand credit substantially to fuel economic growth targetted to grow at eight per cent. They must find new capital to meet international norms and ensure compliance with regulatory requirements.

200 years later, SBI looks overseas

MUMBAI: It has been a long journey for the bank, which opened for business as Bank of Calcutta on June 2, 1806, as interest rates shot up and East India Company’s government wanted public credit.

Over the years, SBI has turned itself into a financial powerhouse, and now looks beyond India to grow. It is planning a “Project Vijay” that will put it on the global banking map, as envisaged by the Finance Minister. “By 2008, SBI plans to rank itself among the top 50 global banks and among the top five in Asia,’’ said SBI Chairman A K Purwar.