Banks should not take excessive risks: PMEAC

Prime Minister8217;s Economic Advisory Council Chairman C Rangarajan said that banks should be discouraged from excessive risk taking to ensure a healthy financial system.

8220;There is no argument that the regulatory regime needs to be restructured 8230; Excessive risk taking and leveraging by banks need to be discouraged by appropriate regulatory measures or controls,8221; Rangarajan said at a seminar organised by Skoch Foundation.

The regulatory regime should be re-structured to make the banking system more sound,he said.

Rangarajan also called for improvement in the country8217;s corporate-bond market saying that this will help even small companies to raise adequate funds.