FM urges banks to ramp up overseas operations

Finance minister P Chidambaram said on Tuesday that the time was ripe for Indian banks to expand into overseas markets.

Speaking at the bi-centennial celebrations of State Bank of India, Chidambaram said he wanted SBI to become a global bank in the next 10-20 years.

"Globalisation is a two-way street. Perception is that foreign banks and foreign institutions are eager to enter India, but the opportunity for Indian banks to go overseas has been largely ignored. Indian bankers have special skills to take on challenges in the overseas markets," Chidambaram said.

He said Indian banks have to prepare for competition from foreign banks, both in the domestic market and overseas.

The finance minister said State Bank of India should also extend credit to those at the bottom of the social pyramid since that segment provided the "biggest opportunity."

"Poor are bankable and credit-worthy. Poor need credit and will repay. SBI and other banks should move towards financial inclusion and lend more to farmers, students and small and medium enterprises and at the same time, improve customer standards," Chidambaram said.

He said the government has appointed a committee under the chairmanship of former Reserve Bank of India governor C. Rangarajan to look at "financial inclusion" and oversee how banks could reach out to more and more people.