Union finance minister P Chidambaram on Saturday said that public sector banks would require around Rs one lakh crore capital over the next five to 10 years.
Delivering his address after releasing Indian Overseas Bank (IOB)@75 book, the saga of good people to grow with, Chidambaram said that the government had all intentions to capitalise banks so that it could meet all the norms, especially Basel norms.
By the end of March 2013, the government will infuse around Rs 15,000 crore as new capital, he said, adding, “We will find all the ways to mobilise this money.”
The finance minister has also urged the banks to look at consolidation. “China has got three banks among top 20 banks in the world but India doesn't even have one. We need one to compete globally and for which we need a bank with strong capital and presence,” he said.
Despite growing at nine per cent in terms of expanding the network, the country is still under-banked, he added.
In 2011-12, banks in India had collectively opened 6,489 branches (on an average 18-19 branches a day). During the current year, the banks are planning to open 6,000-7,000 branches.
At present, all these banks have around 70,000 branches, the finance minister said, adding that the country needed all sort of banks and cooperatives – with local flavours, regional domination, national foot print and banks of world size.
On the banking system, he said, “The system is strong, healthy and robust . Small ailments will not affect our robust economy. The government attached lots of great importance to banks”.
During the financial crisis in the US, around 1,000 branches were collapsed but not even one bank in India had collapsed, courtesy the system, regulation and the regulator, he said.
