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CHAPTER - 9

CONCLUSIONS, SUMMARY AND

RECOMMENDATIONS

From the analy! o" #ata !n $re%!o& 'ha$ter, !t re%eal that the (an)!n*

e'tor !n In#!a ha ma#e !*n!"!'ant $ro*re !n all "!nan'!al !n#!'ator o"

$er"orman'e mea&rement #&r!n* the $ot l!(eral!+at!on $er!o# The #e$o!t

o" the (an)!n* ytem ha%e (een !n'reae# &$ to R ./0120 Crore an# the

(an) 're#!t !n'reae# &$ to R /320201/ Crore an# the !n%etment o" the

In#!an (an)!n* ytem !n'reae# &$ to R ./03/2 Crore at the en# o"

Mar'h 02.. The &mmery o" the "!nan'!al re"orm an# !t !m$a't on the

(an)!n* e'tor !n In#!a ha%e (een &mmar!+e# a &n#er

9. PERFORMANCE OF 4AN5IN6 IN THE PRE-REFORM PERIOD

A $er the analy! ma#e !n 'ha$ter "o&r to e%en, !t ! re%eale# that the

In#!an "!nan'!al ytem !n the $re-re"orm $er!o#, !e, &$to the en# o" .932,

eent!ally 'atere# to the nee# o" $lanne# #e%elo$ment !n a m!7e# e'onomy

"rame8or) 8here the *o%ernment e'tor ha# a #om!neer!n* role !n e'onom!'

a't!%!ty The trate*y o" $lanne# e'onom!' #e%elo$ment re&!re# h&*e

#e%elo$ment e7$en#!t&re, 8h!'h 8a met thoro&*h the#om!nan'e o"

*o%ernment o8nerh!$ o" (an), a&tomat!' monet!+at!on o" "!'al #e"!'!t an#

&(:e't!n* the (an)!n* e'tor to lar*e $re-em$t!on ; (oth !n term o" the

tat&tory hol#!n* o" 6o%ernment e'&r!t!e

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(&t alo a#%erely a""e'te# "!nan'!al mar)et #e%elo$ment All the !*n o"

"!nan'!al re$re!on? 8ere "o&n# !n the ytem

9.. FIRST 4AN5IN6 SECTOR REFORMS

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0

/

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1

Re#&'t!on !n SLR CRR

Tran$arent *&!#el!ne or norm "or entry an# e7!t o" $r!%ate e'tor (an)

P&(l!' e'tor (an) ha%e (een allo8e# "or #!re't a''e to 'a$!tal mar)et

The re*&late# !nteret rate ha%e (een rat!onal!+e# an# !m$l!"!e#

4ran'h l!'en!n* $ol!'y ha (een l!(eral!+e#

A (oar# "or F!nan'!al 4an) S&$er%!!on ha (een eta(l!he# to

tren*then the &$er%!ory ytem o" the R4I

Thee an# other mea&re that ha%e (een ta)en 8o&l# hel$ the h!*hly re*&late#

an# #!re'te# (an)!n* ytem to tran"orm !tel" !nto one 'hara'ter!+e# (y

o$enne, 'om$et!t!on, $rent!al an# &$er%!ory #!'!$l!ne They 8!ll alo ma)e

the ne8 'hallen*e $art!'&larly the *ro8!n* #eman# "rom '&tomer "or h!*h&al!ty er%!'e The o(:e't!%e o" th! ! to ty, #e'r!(e an# analy+e the !m$a't

o" (an)!n* e'tor re"orm on the $er"orman'e o" 'ommer'!al (an) On the (a!

o" the !m$a't o" thee re"orm, to &**et th!r# ne8 mo#!"!e# re"orm, !n the

'han*!n* 'enar!o ! the nee#

Hy$othe! Tet!n*

The re"orm mea&re (ro&*ht a $ara#!*m h!"t !n the (an)!n* !n#&try

an# enhan'e# the o%erall $er"orman'e o" the (an)

The 'ha$ter an# I o" the reear'h ty re%eale# that the "!nan'!al re"orm

8a 'arr!e# o&t an# !t ha 'reate# the e""!'!ent, $ro#&'t!%e an# $ro"!ta(le (an)!n*

e'tor to "&n't!on 8!th o$erat!onal "le7!(!l!ty an# "&n't!onal a&tonomy an# the

(an)!n* e'tor ha ma#e tremen#o& $ro*re !n term o" all "!nan'!al

$arameter !n'l!n* #e$o!t mo(!l!+at!on, loan an# a#%an'e, re#&'t!on !n

NPA, !n'rea!n* o" CRAR et'

Th& the a(o%e hy$othe! ha (een a''e$te#

9.0 SECOND 4AN5IN6 SECTOR REFORMS

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arrete# the #eter!orat!on o" the ytem earl!er (&t there ! t!ll a 'on!#era(le

#!tan'e to tra%ere There ha (een !m$ro%ement !n e%eral o" the &ant!tat!%e

!n#!'e (&t there are many area !n 8h!'h 8ea)nee t!ll $er!t Thee !n'le

'&tomer er%!'e, te'hnolo*!'al &$ *ra#at!on, !m$ro%ement !n ho&e )ee$!n* !n

term o" re'on'!l!at!on o" entr!e an# (alan'!n* o" (oo)

The e'on# re$ort 8a &(m!tte# on 0/r# A$r!l, .993, 8h!'h et the $a'e "or

the e'on# *enerat!on o" (an)!n* e'tor re"orm Thee !n'le@

.

0

Mer*e tron* (an), 'loe 8ea) (an) &n%!a(le one

T8o or three (an) 8!th !nternat!onal or!entat!on, 3 to .2 nat!onal (an)

an# a lar*e n&m(er o" lo'al (an)

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In'reae Ca$!tal A#e&a'y to mat'h enhan'e# (an)!n* r!)

Rat!onal!+e (ran'he an# ta"", re%!e8 re'r&!tmentDe-$ol!t!'!+e 4an) 4oar# &n#er R4I &$er%!!on

Inte*rate N4FC a't!%!t!e 8!th (an)

4&t many '!t!e a8 no $&r$oe !n ett!n* &$ the e'on# NC on (an)!n* e'tor

re"orm 8!th!n !7 year an# (e"ore the "&ll !m$lementat!on o" the

re'ommen#at!on o" the "!rt re$ort o" .99. Str!'tly $ea)!n*, there 8ere no ne8

re'ommen#at!on ma#e !n the e'on# re$ort e7'e$t t8o on@

.

0

Mer*er o" tron* &n!t o" (an)

A#a$tat!on o" the narro8 (an)!n* 'on'e$t to reha(!l!tate the 8ea) (an)

9./ THIRD 6ENERATION 4AN5IN6 REFORMS

The $ro'e o" !m$lement!n* 4ael II norm !n In#!a ! (e!n* 'arr!e# o&t !n

$hae Phae I ha (een 'arr!e# o&t "or "ore!*n (an) o$erat!n* !n In#!a an#

In#!an (an) ha%!n* o$erat!onal $reen'e o&t!#e In#!a 8!th e""e't "rom Mar'h

/.,0223

In $hae II, all other 'he#&le# 'ommer'!al (an)

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$la'e# at 9, one $er'enta*e $o!nt a(o%e the 4ael II re&!rement All the (an)

ha%e the!r Ca$!tal to R!) Ge!*hte# Aet Rat!o

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It ! 8!#ely re'o*n!e# that "!nan'!al !nterme#!at!on ! eent!al to the $romot!on

o" (oth e7ten!%e an# !nten!%e *ro8th E""!'!ent !nterme#!at!on o" "&n# "rom

a%er to &er ena(le the $ro#&'t!%e a$$l!'at!on o" a%a!la(le reo&r'e The

*reater the e""!'!en'y o" the "!nan'!al ytem !n &'h reo&r'e *enerat!on an#

allo'at!on, the h!*her ! !t l!)ely 'ontr!(&t!on to e'onom!' *ro8th Im$ro%e#

allo'at!%e e""!'!en'y 'reate a %!rt&o& 'y'le o" h!*her real rate o" ret&rn an#

!n'rea!n* a%!n*, re&lt!n*, !n t&rn, !n h!*her reo&r'e *enerat!on Th&,

#e%elo$ment o" the "!nan'!al ytem ! eent!al to &ta!n!n* h!*her e'onom!'

*ro8th The &mmery o" the ty on "!nan'!al re"orm an# !t !m$a't ! #!%!#e# !n

#!""erent $hae a &n#er

Hy$othe! Tet!n*

The re"orm !n (an)!n* e'tor tran"orme# the re*&late# en%!ronment !nto

a mar)et-or!ente# one an# !n#&'e# 'om$et!t!%ene !n (an)!n* !n#&try

The ty re%eale# that the "!nan'!al re"orm ha $ro%!#e# $a'e to o$en the

(an)!n* e'tor "or In#!an a 8ell a "ore!*n (an) an# th& 'reate# e""!'!ent,

$ro#&'t!%e an# 'om$et!t!%e en%!ronment re&lte# !nto the (etterment o" (an)!n*

er%!'e "or the '&tomer

There "ore the a(o%e hy$othe! ha (een a''e$te#

90 OUTLINE OF REFORMS

The ty 8a relate# to "!n# o&t the "!nan'!al re"orm an# !t !m$a't on (an)

an# the trate*!' re$one *!%en (y the (an)!n* e'tor to th! "!nan'!al re"orm

. A the "!nan'!al e'tor re"orm en'om$ae# (roa#ly !nt!t&t!on e$e'!ally(an)!n*, #e%elo$ment o" "!nan'!al mar)et, monetary "!'al an# e7ternal

e'tor mana*ement an# le*al an# !nt!t&t!onal !n"ratr&'t&re Re"orm

mea&re !n In#!a 8ere e&en'e# to 'reate an ena(l!n* en%!ronment "or

(an) to o%er'ome the e7ternal 'ontra!nt an# o$erate 8!th *reater

"le7!(!l!ty S&'h mea&re relate# to #!mantl!n* o" a#m!n!tere# tr&'t&re o"

//9

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!nteret rate, remo%al o" e%eral $reem$t!on !n the "orm o" reer%e

re&!rement an# 're#!t allo'at!on to 'erta!n e'tor Interet rate

#ere*&lat!on 8a !n ta*e an# allo8e# (&!l# &$ o" &""!'!ent re!l!en'e !n the

ytem Th! ! an !m$ortant 'om$onent o" the re"orm $ro'e 8h!'h ha

!m$arte# *reater e""!'!en'y !n reo&r'e allo'at!on Parallel tren*then!n* o"

$rent!al re*&lat!on, !m$ro%e# mar)et (eha%!o&r, *ra#&al "!nan'!al o$en!n*

an#, a(o%e all, the &n#erly!n* !m$ro%ement !n ma'roe'onom!' mana*ement

hel$e# the l!(eral!at!on $ro'e to r&n mooth

0 A a $art o" "!nan'!al re"orm, the !nteret rate ha%e (een lar*ely #ere*&late#

e7'e$t "or 'erta!n $e'!"!' 'lae, thee are@ a%!n* #e$o!t a''o&nt, non-

re!#ent In#!an

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re"orm !nto the $&(l!' e'tor (an) amo&nte# to le than . $er 'ent o"

In#!a? 6DP, a "!*&re m&'h lo8er than that "or many other 'o&ntr!e

1 Another ma:or o(:e't!%e o" (an)!n* e'tor re"orm ha (een to enhan'e

e""!'!en'y an# $ro#&'t!%!ty thro&*h !n'reae# 'om$et!t!on Eta(l!hment o"

ne8 (an) 8a allo8e# !n the $r!%ate e'tor an# "ore!*n (an) 8ere alo

$erm!tte# more l!(eral entry N!ne ne8 $r!%ate (an) are !n o$erat!on at

$reent, a''o&nt!n* "or aro&n# .2-.0 $er 'ent o" 'ommer'!al (an)!n* aet

The ma:or te$ to8ar# enhan'!n* 'om$et!t!on 8a allo8!n* "ore!*n #!re't

!n%etment !n $r!%ate e'tor (an) &$ to > $er 'ent "rom all o&r'e From

0229, "ore!*n (an) ha%e (een allo8e# (an)!n* $reen'e !n In#!a e!ther

thro&*h eta(l!hment o" &(!#!ar!e !n'or$orate# !n In#!a or thro&*h(ran'he

Im$re!%e !nt!t&t!onal re"orm ha%e alo hel$e# !n reha$!n* the "!nan'!al

mar)et$la'e A h!*h-$o8ere# 4oar# "or F!nan'!al S&$er%!!on

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&n#erta)!n* 'onol!#ate# &$er%!!on o" (an) *ro&$, $re$arat!on o"

'onol!#ate# "!nan'!al tatement 0

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o" the F!'al Re$on!(!l!ty an# 4*et Mana*ement A't !n 022/, "rom A$r!l

., 0221 the Reer%e 4an) ha 8!th#ra8n "rom $art!'!$at!n* !n the $r!mary

!&e o" Central 6o%ernment e'&r!t!e

Hy$othe! Tet!n*

The In"ormat!on te'hnolo*y !n (an)!n* (&!ne ha a %!!(le !m$a't on

the &al!ty o" '&tomer er%!'e

4an)!n* Se'tor Re"orm alo ta)en 'are o" the Te'hnolo*y &$*ra#at!on an#

!t Relate# Mea&re The R4I ha tarte# RT6S, Core 4an)!n* ol&t!on,

INFINET a the 'omm&n!'at!on (a')(one "or the (an)!n* e'tor TheNe*ot!ate# Deal!n* Sytem

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an# te'hnolo*!'al #e%elo$ment, alon* 8!th 'on'om!tant !m$ro%ement !n

tran$aren'y an# the le*al "rame8or)

9/ PROCESSES OF REFORMS

. A"ter e%al&at!on o" the re"orm an# !t !m$a't on In#!an (an)!n* ytem, !t !

"o&n# that the $ro'e re"orm ha (een 'on!#ere# a &n!&e "eat&re o"

In#!an (an)!n* re"orm F!rt, "!nan'!al e'tor re"orm 8a &n#erta)en early !n

the re"orm 'y'le !n In#!a Se'on#, the (an)!n* e'tor re"orm 8ere not #r!%en

(y any !mme#!ate 'r!! a ha o"ten (een the 'ae !n e%eral emer*!n*

e'onom!e Th!r#, the #e!*n an# #eta!l o" the re"orm 8ere e%ol%e# (y

#omet!' e7$ert!e, 8h!le ta)!n* on (oar# the !nternat!onal e7$er!en'e !n th!re*ar# Fo&rth, eno&*h $a'e 8a 'reate# "or the *ro8th an# healthy

'om$et!t!on amon* $&(l!' an# $r!%ate e'tor a 8ell a "ore!*n an# #omet!'

e'tor

0 The "!nan'!al l!(eral!+at!on $ro'e !n In#!a to8ar# !m$ro%!n* the "&n't!on!n*

o" !nt!t&t!on an# mar)et "o&n# %ery m&'h &e"&l to all, !n'l!n* (an)!n*

!nt!t&t!on, $&(l!' an# $ol!'y ma)er Prent!al re*&lat!on an# &$er%!!on

ha !m$ro%e#B the 'om(!nat!on o" re*&lat!on, &$er%!!on an# a"ety net ha

l!m!te# the !m$a't o" &n"oreeen ho') on the "!nan'!al ytem In a##!t!on,

the role o" mar)et "or'e !n ena(l!n* $r!'e #!'o%ery ha enhan'e# The

#!mantl!n* o" the ert8h!le a#m!n!tere# !nteret rate tr&'t&re ha $erm!tte#

"!nan'!al !nterme#!ar!e to $&r&e len#!n* an# #e$o!t ta)!n* (ae# on

'ommer'!al 'on!#erat!on an# the!r aet-l!a(!l!ty $ro"!le The "!nan'!al

l!(eral!at!on $ro'e ha alo ena(le# to re#&'e the o%erhan* o" non-

$er"orm!n* loan@ th! enta!le# (oth a Jto')? / F!nan'!al ent!t!e ha%e (e'ome !n'rea!n*ly 'on'!o& a(o&t r!)

mana*ement $ra't!'e an# ha%e !nt!t&te# r!) mana*ement mo#el (ae#

on the!r $ro#&'t $ro"!le, (&!ne $h!loo$hy an# '&tomer or!entat!on

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A##!t!onally, a''e to 're#!t ha !m$ro%e#, thro&*h ne8ly eta(l!he#

#omet!' (an), "ore!*n (an) an# (an)-l!)e !nterme#!ar!e 6o%ernment

#e(t mar)et ha%e #e%elo$e#, ena(l!n* *reater o$erat!onal !n#e$en#en'e !n

monetary $ol!'y ma)!n* The *ro8th o" *o%ernment #e(t mar)et ha alo

$ro%!#e# a (en'hmar) "or $r!%ate #e(t mar)et to #e%elo$

> There ha%e alo (een !*n!"!'ant !m$ro%ement !n the !n"ormat!on

!n"ratr&'t&re The a''o&nt!n* an# a!t!n* o" !nterme#!ar!e ha !m$ro%e#

In"ormat!on on mall (orro8er ha !m$ro%e# an# !n"ormat!on har!n* thro&*h

o$erat!onal!+at!on o" 're#!t !n"ormat!on (&rea& ha hel$e# to re#&'e

!n"ormat!on aymmetry The te'hnolo*!'al !n"ratr&'t&re ha #e%elo$e# !n

tan#em 8!th mo#ern-#ay re&!rement !n !n"ormat!on te'hnolo*y an#'omm&n!'at!on net8or)!n*

The !m$ro%ement !n the $er"orman'e o" the "!nan'!al ytem o%er the

#e'a#e-an#-a-hal" o" re"orm are alo re"le'te# !n the !m$ro%ement !n a

n&m(er o" !n#!'ator Ca$!tal a#e&a'y o" the (an)!n* e'tor re'or#e# a

mar)e# !m$ro%ement an# too# (et8een .. to ./ #&r!n* 022 to 02.2

1 On the aet &al!ty "ront, not8!thtan#!n* the *ra#&al t!*hten!n* o" $rent!al

norm, non-$er"orm!n* a#%an'e

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0229-.2 Thee n&m(er are 'om$ara(le to thoe o(ta!n!n* "or lea#!n*

#e%elo$e# 'o&ntr!e 8h!'h 8ere ran*e-(o&n# (et8een .>-// $er 'ent !n

02.2

3 4an) $ro"!ta(!l!ty le%el !n In#!a ha%e alo tren#e# &$8ar# an# *ro $ro"!t

too# at 02 $er 'ent #&r!n* 0229-.2 1

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the !n'reae# '&tomer or!entat!on an# '&tomer "o'& on the $art o"

(an) !n $ot-re"orm $er!o# 4an) an# no8 la&n'h!n* ne8 $ro#&'t

an# ne8 er%!'e 4an) are no8 'om$et!n* !n $ro%!#!n* any8here

(an)!n*, net (an)!n*, $hone (an)!n*, ATM "a'!l!ty, et' Pro#&'t

!nno%at!on ! *!%en a lot o" !m$ortan'e

I A a 'one&en'e o" re"K9rm, e%eral ne8 tren# ha%e (een

emer*!n* !n In#!an (an)!n* Earl!er #e$o!t mo(!l!+e# an#

o&ttan#!n* "!*&re o" #e$o!t 8ere yar#t!') "or mea&r!n*

$er"orman'e To#ay, tren*th o" (alan'e heet ! 'on!#ere#

!m$ortant Ret&rn on aet, $er em$loyee $ro#&'t!%!ty, &ant&m o"

$ro"!t an# $er em$loyee $ro"!t, lo8 rat!o o" NPA an# net NPA ratean# earn!n* $er hare are 'on!#ere# $arameter to#ay

The 'om$et!t!%e en%!ronment ha re&lte# !n ne8 'hallen*e "or the

$&(l!' e'tor (an) to reta!n the!r hare On*o!n* 'han*e !n the

tr&'t&re o" In#!an (an)!n* are 'learly %!!(le Gh!le the hare o"

$&(l!' e'tor (an) !n the total aet o" the (an)!n* e'tor ha

ho8n a tea#y #e'l!ne, the ne8 $r!%ate e'tor (an) ha%e

&''ee#e# !n enhan'!n* the!r $o!t!on

I In the "a'e o" the *ro8!n* 'om$et!t!on, the $ol!'y 'han*e an# the

o$erat!onal en%!ronment !n re$e't o" the In#!an (an)!n* ytem

there ha (een an !n'reae# "o'& on $ro"!ta(!l!ty, altho&*h o'!al

o(:e't!%e 'ont!n&e to (e !m$ortant Cone&ently, mot o" the (an) !n

the $&(l!' e'tor ha%e ho8n a !*n!"!'ant !m$ro%ement !n the!r $ro"!t

$er"orman'e Gh!le $r!%ate e'tor (an) 'ont!n&e to earn h!*her $ro"!t, the

#!""eren'e !n the $ro"!t $er"orman'e amon* #!""erent (an) *ro&$ ha

a$$eare# to (e narro8e# #o8n

II The $ro"!t $er"orman'e ha (een %ar!e# amon* #!""erent (an) *ro&$

8!th re$e't o" !n#!%!#&al (an) a 8ell The (an) 'o%ere# &n#er

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ty ha%e enhan'e# the!r hare !n the total (&!ne (&t ma:or!ty

8!tnee# #eter!orat!on !n the $ro"!t $er"orman'e Th! 8a

e$e'!ally o !n the 'ae o" ne8 $r!%ate e'tor (an) 6enerally, ne8

$r!%ate e'tor (an) ha%e "are# (etter than $&(l!' e'tor (an) an#

ol# $r!%ate e'tor (an) Th! re"le't the "a%o&ra(le e""e't o" the

a#o$t!on o" ne8 te'hnolo*y

III There ! h!"t o" "o'& "rom $ro'e-(ae# mana*ement to r!)-

(ae# mana*ement No8 r!) ha%e to (e !#ent!"!e# 'ate*or!+e# an#

a$$ro$r!ately $r!'e#, (ae# on r!) $er'e$t!on The (an)!n* !n#&try

ha# reen*!neere# !t o$erat!onal $ol!'!e to a''ommo#ate thee

a$e't !nto the!r o$erat!onal a't!%!t!e

I The Interet rate $rea# ha el!'!te# a #e'l!ne o%er the year !n the

'ae o" #!""erent *ro&$ o" $&(l!' e'tor (an) an# In#!an $r!%ate

e'tor (an) The $rea# 8a the lo8et !n the 'ae o" ne8 $r!%ate

e'tor (an) The #!""eren'e amon* #!""erent (an) *ro&$ 'ont!n&e

to (e h!*h

D&e to 'om$et!t!on the (an) re'o*n!+e# the nee# to &n#erta)e 'ot

re#&'t!on, $art!'&larly, the $&(l!' e'tor (an) ma#e e%ery e""ort to

'&t #o8n !t 8a*e (!ll (y a#o$t!n* #o8n!+!n* an# retr&'t&r!n* o"

the 8or)"or'e The (an)!n* !n#&try ha# to reen*!neer !t o$erat!onal

$ol!'!e In the 'ae o" ne8 $r!%ate e'tor (an), thee 'ot

re*!tere# a mo#erate !n'reae #&e to &e o" h!*hly &al!"!e# h&man

reo&r'e

I The le%el o" Non-Per"orm!n* Aet

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*ro&$ The !n'reae# NPA "or'e# the (an)!n* e'tor to 'ome &$

8!th !nno%at!%e !#ea "or #e$loyment o" "&n# 8!th leat 're#!t an#

r!)

II The e7$e'tat!on o" 'on&mer ha%e (een *ro8!n* 4roa#ly, thee

e7$e'tat!on are 8!"t er%!'e 8!th m!n!mal re$one t!me, e""!'!ent

er%!'e #el!%ery, ta!lor ma#e an# %al&e-a##e# $ro#&'t to &!t

$e'!"!' nee#, hale-"ree $ro'e#&re an# m!n!m&m trana't!on

'ot, an# $leaant an# $eronal!+e# er%!'e

III The Non-!nteret !n'ome o" (oth $&(l!' an# $r!%ate e'tor (an)

e7h!(!te# an !n'reae #&r!n* the $er!o# &n#er ty #&e to o"ten!n*o" !nteret rate an# #el!%er!n* a $ort"ol!o o" "ee-(ae# er%!'e !n

a''or#an'e 8!th the *ro8!n* 'on&mer nee# 4&t the non-!nteret

!n'ome ! t!ll la**!n* (eh!n# !nteret !n'ome o" all *ro&$ o" (an)-

The Ne8 Pr!%ate Se'tor 4an), 8h!'h ha%e "rom the!r %ery tart

ren#er!n* %ar!o& ty$e o" "ee-(ae# er%!'e are a(le to earn a

h!*her $er'enta*e o" non-!nteret !n'ome 8hen 'om$are# to not only

to the!r 'o&nter$art (&t alo to #!""erent *ro&$ o" P&(l!' Se'tor

4an)

I The "!nan'!al health o" (an) !m$ro%e# #&e to $re'r!(e# $rent!al

norm Almot all (an) !m$ro%e# the!r Ca$!tal a#e&a'y an# Aet

&al!ty

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9 FUTURE AHEAD

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*o%ernment an# the re*&lator $lay!n* at (et a "a'!l!tat!n* role Se'on#, the

$ro'e o" 'onol!#at!on #oe not mean that mall or me#!&m !+e# (an) 8!ll

ha%e no "&t&re Many o" the In#!an (an) are o" a$$ro$r!ate !+e !n relat!on to

the In#!an !t&at!on A't&al e7$er!en'e ho8 that mall an# me#!&m !+e# (an)

e%en !n a#%an'e# 'o&ntr!e ha%e (een a(le to &r%!%e an# rema!n $ro"!ta(le

Thee (an) ha%e &r%!%e# alon* 8!th %ery lar*e "!nan'!al 'on*lomerate Small

(an) may (e the more nat&ral len#er to mall (&!nee

0 The e'on# 'hallen*e ! relate# to ma!nta!n the 'a$!tal a#e&a'y 4ael I

tan#ar# ha%e (een &''e"&lly !m$lemente# !n In#!a an# the a&thor!t!e

are $reently mo%!n* to8ar# a#o$t!on o" 4ael II ta!lore# to 'o&ntry? $e'!"!'

'on!#erat!on A#o$t!on o" 4ae II norm 8!ll enhan'e the re&!re# 'a$!tal4e!#e, (an)? aet 8!ll *ro8 or 8!ll ha%e to *ro8 !n tan#em 8!th the

*ro8th o" the real e'tor o" the e'onomy

/ It ! "o&n# that the $&(l!' e'tor (an)? a(!l!ty to meet the *ro8!n* nee#, 8!ll

(e !nh!(!te#, &nle the *o%ernment ! 8!ll!n* to (r!n* !n more 'a$!tal At

$reent, the hare o" the *o%ernment !n the $&(l!' e'tor (an) 'annot *o

(elo8 . $er 'ent Gh!le there ! ome 'o$e "or e7$an#!n* 'a$!tal thro&*h

%ar!o& mo#al!t!e, t!er-I 'a$!tal, that ! e&!ty, ! t!ll 'r!t!'al Gh!le th!

'ontra!nt may not (e (!n#!n* !mme#!ately, ooner or later !t 8!ll (e I" *ro8th

! mo#et, reta!ne# earn!n* may "orm an a#e&ate o&r'e o" &$$ly

Ho8e%er, 8hen *ro8th ! ra$!# 8h!'h ! l!)ely to (e the 'ae, there ! nee# "or

!n:e't!on o" e&!ty, enlar*!n* the harehol#!n*

> In th! !t&at!on, the *o%ernment 8!ll ha%e to ma)e &$ !t m!n# e!ther to (r!n*

!n a##!t!onal 'a$!tal or mo%e to8ar# re#&'!n* !t hare "rom . $er 'ent

thro&*h a$$ro$r!ate tat&tory 'han*e A th!r# alternat!%e 'o&l#, ho8e%er, (e

to !n'le !n the #e"!n!t!on o" *o%ernment &'h ent!t!e a the L!"e In&ran'e

Cor$orat!on that are &a!-*o%ernment !n nat&re an# are l!)ely to rema!n to (e

"&lly o8ne# or an !nte*ral $art o" the *o%ernment ytem !n the "&t&re

Ho8e%er, e%en to #o th! an amen#ment ! nee#e# !n the tat&te

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The th!r# a$e't 'on'ern r!) mana*ement The mot !m$ortant "a'et o" r!)

!n In#!a or "or that matter !n mot #e%elo$!n* 'o&ntr!e mar)et rema!n the

're#!t r!) Mana*ement o" 're#!t r!) ! an area 8h!'h ha re'e!%e#

'on!#era(le attent!on !n re'ent year The ne8 4ale a''or#, ret on the

a&m$t!on that an !nternal aement o" r!) (y a "!nan'!al !nt!t&t!on 8!ll

(e a (etter mea&re than an e7ternally !m$oe# "orm&la

tr&'t&re ! &n#er*o!n* a 'han*e

The e'onom!'

1 The er%!'e e'tor ha emer*e# a ma:or e'tor Ae!n* 're#!t r!) !n

len#!n* to er%!'e e'tor nee# a metho#olo*y #!""erent "rom ae!n* r!)

8h!le len#!n* to man&"a't&r!n* There are other area o" len#!n* &'h aho&!n* an# 'on&mer 're#!t 8h!'h 8!ll nee# ne8 a$$roa'he

The mana*ement o" e7'han*e r!) ! one o" the mot !m$ortant area

4e!#e ena(l!n* '&tomer to a#o$t a$$ro$r!ate e7'han*e 'o%er, (an)

themel%e 8!ll ha%e to en&re that the!r e7$o&re ! 8!th!n a''e$ta(le l!m!t

an# ! $ro$erly he#*e# The ent!re area o" r!) mana*ement en'om$a!n*

all a$e't o" r!) !n'l!n* 're#!t r!), mar)et r!) an# o$erat!onal r!) 8!ll

ha%e to re'e!%e $r!me attent!on

3 The "o&rth 'on'ern I 8ant to re"er to ! !m$ro%ement !n '&tomer er%!'e

4an) e7!t to $ro%!#e er%!'e to '&tomer G!th the !ntro#&'t!on o"

te'hnolo*y, there ha (een a !*n!"!'ant 'han*e !n the 8ay (an) o$erate

Th! ! a "ar 'ry "rom the !t&at!on that e7!te# e%en . year a*o The

!n#&'t!on o" te'hnolo*y ha ena(le# e%eral trana't!on to (e $ro'ee# !n a

horter $er!o# o" t!me Tranm!!on o" "&n# to '&tomer ta)e le t!me

no8 ATM $ro%!#e eay a''e to 'ah Ne%erthele, !t ! not %ery 'lear

8hether the '&tomer a #e$o!tor an# &er o" other (an)!n* er%!'e are

"&lly at!"!e# 8!th the er%!'e $ro%!#e# 8hen they 'ome to a (an) Th! !

an area, 8h!'h m&t re'e!%e 'ont!n&o& attent!on

'&tomer nee# to !m$ro%e

/0

The !nter"a'e 8!th the

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9 Pro%!!on o" 're#!t ! a (a!' "&n't!on o" (an) The e""e't!%e #!'har*e o" th!

"&n't!on ! $art o" the !nterme#!at!on $ro'e The e'toral #e$loyment o"

're#!t m&t )ee$ $a'e 8!th the 'han*e !n the tr&'t&re o" the e'onomy The

(an)!n* !n#&try !n In#!a m&t e&!$ !tel" to (e a(le to ae an# meet the

're#!t nee# o" the emer*!n* e*ment o" the e'onomy In th! 'onte7t, t8o

a$e't re&!re $e'!al attent!on

.2 F!rt, a the In#!an e'onomy *et !n'rea!n*ly !nte*rate# 8!th the ret o" the

8orl#, the #eman# o" the 'or$orate e'tor "or (an)!n* er%!'e 8!ll 'han*e

not only !n !+e (&t alo !n 'om$o!t!on an# &al!ty The *ro8!n* "ore!*n tra#e

!n *oo# an# er%!'e 8!ll ha%e to (e "!nan'e# A$art "rom $ro#&'t!on 're#!t,"!nan'!n* 'a$!tal re&!rement "rom the 'hea$et o&r'e 8!ll (e'ome

ne'eary Pro%!!on o" 're#!t !n "ore!*n '&rren'y 8!ll re&!re !n t&rn a

mana*ement o" "ore!*n e7'han*e r!) Th&, the $ro%!!on o" a 8hole *am&t

o" er%!'e relate# to !nte*rat!on 8!th the ret o" the 8orl# 8!ll (e a 'hallen*e

Fore!*n (an) o$erat!n* !n In#!a 8!ll (e the 'om$et!tor to In#!an (an) !n th!

re*ar#

.. The "ore!*n (an) ha%e a''e to m&'h lar*er reo&r'e an# ha%e $reen'e

!n many $art o" the 8orl# There"ore, In#!an (an) 8!ll ha%e to e%ol%e

a$$ro$r!ate trate*!e !n ena(l!n* In#!an "!rm to a''e!n* "&n# at

'om$et!t!%e rate

.0 It ! alo een that the *lo(al "!nan'!al trate*y ! more relate to the $reen'e

o" In#!an (an) !n "ore!*n 'o&ntr!e In#!an (an) 8!ll ha%e to (e ele't!%e !n

th! re*ar# Here a*a!n the "o'& may (e on ho8 to hel$ In#!an "!rm a'&!re

"&n# at !nternat!onally 'om$et!t!%e rate an# ho8 to $romote tra#e an#

!n%etment (et8een In#!a an# other 'o&ntr!e Ge m&t re'o*n!+e that !n

"ore!*n lan#, In#!an (an) 8!ll (e relat!%ely maller $layer The mot!%at!on

to (&!l# &$ an !nternat!onal $reen'e m&t (e *&!#e# (y the ro&te In#!an

ent!t!e ta)e !n the *lo(al (&!ne

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./ De$!te the "ater rate o" *ro8th o" man&"a't&r!n* an# er%!'e e'tor, (&l) o"

the $o$&lat!on t!ll #e$en# on a*r!'&lt&re an# all!e# a't!%!t!e "or !t

l!%el!hoo# In th! (a')*ro&n#, one 'annot o%er-em$ha!+e the nee# "or

Gh!le (an) ha%ee7$an#!n* 're#!t to a*r!'&lt&ral an# all!e# a't!%!t!e

a'h!e%e# a h!*her *ro8th !n $ro%!!on o" 're#!t to a*r!'&lt&re an# all!e#

a't!%!t!e lat year, th! moment&m ha to (e 'arr!e# "&rther

.> The 're#!t "or a*r!'&lt&re ! not a !n*le mar)et no8 an# there ! a nee# to

$ro%!#e more 're#!t "or h!*h-te'h a*r!'&lt&re 4&t (an) are 'on!#er!n* the

H!-te'h a*r!'&lt&re a !n#&try an# th& the h!*h te'h a*r! I not *ett!n*

#e!ra(le moment&m Th& there ! a nee# to 'han*e the $ol!'y !n th!

re*ar#

. It ! "o&n# !n the ty that the 'ommer'!al (an) 8ere a**re!%e !n

$ro%!#!n* 're#!t to man&"a't&r!n* an# er%!'e e*ment 8here the normal

'al'&lat!on o" r!) an# ret&rn a$$l!e

.1 4&t there ! nee# to ma#e more $ro%!!on o" 're#!t to mall an# mar*!nal

"armer They 'ont!t&te a (&l) o" the "armer an# a''o&nt!n* "or a

!*n!"!'ant $ro$ort!on o" the total o&t$&t

. The Nat!onal Sam$le S&r%ey Or*an!+at!on ha re'ently releae# a Re$ort

ent!tle#, In#e(te#ne o" Farmer Ho&ehol# Th! Re$ort 'onta!n a

A $er8ealth o" #ata relat!n* to the e7tent an# nat&re o" !n#e(te#ne

NSSO #ata .> $er 'ent o" the total "arm ho&ehol# #!# not ha%e a''e to

're#!t Another "a't that emer*e ! that there ! a &(tant!al #!""eren'e

(et8een mar*!nal an# &(-mar*!nal "armer on the one han# an# the ret o"

the "armer ho&ehol# on the other re*ar#!n* the $&r$oe "or 8h!'h loan are

o(ta!ne# an# the o&r'e o" 're#!t For all "armer ho&ehol# ta)en to*ether,

at the all-In#!a le%el, !nt!t&t!onal o&r'e 8ere re$on!(le "or $ro%!#!n*

$er 'ent o" the total 're#!t 4&t a "ar a "armer ho&ehol# o8n!n* one

he'tare an# le, th! $ro$ort!on ! only /91 $er 'ent For all "armer

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ho&ehol#, the $ro$ort!on o" loan *o!n* "or $ro#&'t!on $&r$oe ! 1. $er

'ent a a*a!nt >20 $er 'ent "or mar*!nal an# &(-mar*!nal "armer

ho&ehol# Th&, "or &(-mar*!nal an# mar*!nal "armer, the $ro$ort!on o"

$ro#&'t!on loan ! lo8er than "or all "armer

.3 S!m!larly, the $ro$ort!on o" !nt!t&t!onal 're#!t ! lo8er "or &(-mar*!nal an#

mar*!nal "armer than "or all "armer Th!, !n "a't, ! tr&e o" e%ery tate o" the

'o&ntry Th&, a 'r!t!'al !&e ! ho8 to meet the 're#!t re&!rement o"

mar*!nal an# &(-mar*!nal "armer Ghat 'han*e #o 8e nee# to !ntro#&'e

o that 're#!t 'an "lo8 to th! 'la o" "armer ho&ehol# Can the (an)!n*

ytem thro&*h !t $reent mo#e o" #!tr!(&t!on o" 're#!t meet th! 'hallen*e

Sho&l# 8e th!n) !n term o" (an) &$$ort!n* other !nt!t&t!on 8ho are !n a(etter $o!t!on to len# to mar*!nal an# &(-mar*!nal "armer 4an) nee# to

th!n) har# on ho8 to e""e't!%ely &e the "a'!l!tator an# 'orre$on#ent?

mo#el Thee mo#el ha%e *reat $otent!al to rea'h o&t to mall (orro8er

an# #e$o!tor In any 'ae, a re-loo) at the or*an!+at!onal tr&'t&re o" o&r

r&ral (ran'he ! 'alle# "or 4an) nee# to th!n) #ee$ly on ho8 to meet th!

'hallen*e o" meet!n* the 're#!t nee# o" mar*!nal "armer

!n'l&!on ! no lon*er an o$t!onB !t ! a 'om$&l!on

F!nan'!al

.9 The ta) to (e "&l"!lle# (y the In#!an (an) ! tr&ly "orm!#a(le At one en# 8e

e7$e't (an) to (e a(le to len# (!ll!on o" r&$ee to lar*e (orro8er At the

ame t!me 8e 8ant them to (e a(le to #el!%er e7tremely mall loan to meet

the re&!rement o" the mall (orro8er Ge m&t re"le't on the )!n# o"

or*an!+at!onal tr&'t&re an# h&man talent that 8e nee# !n or#er to a'h!e%e

thee t8!n *oal 8h!'h are at the t8o e7treme en# o" the $e'tr&m o"

len#!n*

02 The "!rt $hae o" (an)!n* e'tor re"orm ha 'ome to a 'loe an# the In#!an

(an)!n* ! mo%!n* on to the e'on# $hae In the year to 'ome, the In#!an

"!nan'!al ytem 8!ll *ro8 not only !n !+e (&t alo !n 'om$le7!ty a the "or'e

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o" 'om$et!t!on *a!n "&rther moment&m an# a "!nan'!al mar)et *et more an#

more !nte*rate#

0. 6lo(al!at!on ; a 'hallen*e a 8ell a an o$$ort&n!ty

The 8a%e o" *lo(al!+at!on are 8ee$!n* a'ro the 8orl#, an# ha%e thro8n

&$ e%eral o$$ort&n!t!e a''om$an!e# (y 'on'om!tant r!) Inte*rat!on o"

#omet!' mar)et 8!th !nternat!onal "!nan'!al mar)et ha (een "a'!l!tate# (y

tremen#o& a#%an'ement !n !n"ormat!on an# 'omm&n!'at!on te'hnolo*y

There ! a *ro8!n* real!+at!on that the a(!l!ty o" 'o&ntr!e to 'on#&'t (&!ne

a'ro nat!onal (or#er an# the a(!l!ty to 'o$e 8!th the $o!(le #o8n!#e

r!) 8o&l# #e$en#, !nter al!a, on the o&n#ne o" the "!nan'!al ytem Th!ha ne'e!tate# 'on%er*en'e o" $rent!al norm 8!th !nternat!onal (et

$ra't!'e a 8ell 'on!tent re"!nement o" the te'hnolo*!'al an# !nt!t&t!onal

"rame8or) !n the "!nan'!al e'tor thro&*h a non-#!r&$t!%e an# 'on&ltat!%e

$ro'e

00 Im$ro%!n* r!) mana*ement ytem

4ael II ha (ro&*ht !nto "o'& the nee# "or a more 'om$rehen!%e r!)

mana*ement "rame8or) to #eal 8!th %ar!o& r!), !n'l!n* 're#!t an# mar)et

r!) an# the!r !nter-l!n)a*e 4an) !n In#!a are alo mo%!n* "rom the

!n#!%!#&al !lo ytem to an enter$r!e-8!#e r!) mana*ement ytem Gh!le

the "!rt m!letone 8o&l# (e r!) !nte*rat!on a'ro the ent!ty, the ne7t te$

8o&l# enta!l r!) a**re*at!on a'ro the *ro&$ (oth !n the $e'!"!' r!) area

a alo a'ro the r!) 4an) 8o&l#, there"ore, (e re&!re# to allo'ate

!*n!"!'ant reo&r'e to8ar# th! en#ea%o&r In In#!a, the r!)-(ae#

a$$roa'h to &$er%!!on ! alo er%!n* a a 'atalyt to (an)? m!*rat!on to

the !nte*rate# r!) mana*ement ytem Ho8e%er, ta)!n* !nto a''o&nt the

#!%er!ty !n the In#!an (an)!n* ytem, ta(!l!+!n* the R4S a an e""e't!%e

&$er%!ory me'han!m ! another 'hallen*e

/1

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0/ Cor$orate *o%ernan'e

To a lar*e e7tent, many r!) mana*ement "a!l&re re"le't a (rea)#o8n !n

'or$orate *o%ernan'e 8h!'h ar!e #&e to $oor mana*ement o" 'on"l!'t o"

!nteret, !na#e&ate &n#ertan#!n* o" )ey (an)!n* r!), an# $oor 4oar#

o%er!*ht o" the me'han!m "or r!) mana*ement an# !nternal a!t

Cor$orate *o%ernan'e !, there"ore, the "o&n#at!on "or e""e't!%e r!)

mana*ement !n (an) an#, th&, the "o&n#at!on "or a o&n# "!nan'!al

ytem There"ore, the 'ho!'e 8h!'h (an) ma)e 8hen they eta(l!h the!r

r!) mana*ement an# 'or$orate *o%ernan'e ytem ha%e !m$ortant

ram!"!'at!on "or "!nan'!al ta(!l!ty 4an) may ha%e to '&lt!%ate a *oo#

*o%ernan'e '&lt&re (&!l#!n* !n a$$ro$r!ate 'he') an# (alan'e !n the!ro$erat!on There are "o&r !m$ortant "orm o" o%er!*ht that ho&l# (e

!n'le# !n the or*an!+at!onal tr&'t&re o" any (an) !n or#er to en&re

a$$ro$r!ate 'he') an# (alan'e@

the!r :o( F&rthermore, the *eneral $r!n'!$le o" o&n# 'or$orate *o%ernan'e

ho&l# alo (e a$$l!e# to all (an), !rre$e't!%e o" the!r &n!&e o8nerh!$

tr&'t&re

0> Im$lementat!on o" ne8 a''o&nt!n* tan#ar#

Der!%at!%e a't!%!ty !n (an) ha (een !n'rea!n* at a (r!) $a'e Gh!le the r!)

mana*ement "rame8or) "or #er!%at!%e tra#!n*, 8h!'h ! a relat!%ely ne8 area

"or In#!an (an)

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"!nan'!al !ntr&ment The A''o&nt!n* Stan#ar# 4oar# o" the Int!t&te o"

Chartere# A''o&ntant o" In#!a

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&$er%!!on o" "!nan'!al 'on*lomerate are a 'hallen*e not only to the

Reer%e 4an) o" In#!a (&t alo to the other re*&latory a*en'!e, 8h!'h nee#

to ha%e a 'loe an# 'ont!n&e# 'oor#!nat!on on an on-*o!n* (a!

In %!e8 o" !n'reae# "o'& on em$o8er!n* &$er%!or to &n#erta)e

'onol!#ate# &$er%!!on o" (an) *ro&$ an# !n'e the Core Pr!n'!$le "or

E""e't!%e 4an)!n* S&$er%!!on !&e# (y the 4ael Comm!ttee on 4an)!n*

S&$er%!!on ha%e &n#er'ore# 'onol!#ate# &$er%!!on a an !n#e$en#ent

$r!n'!$le, the Reer%e 4an) ha# !ntro#&'e#, a an !n!t!al te$, 'onol!#ate#

a''o&nt!n* an# other &ant!tat!%e metho# to "a'!l!tate 'onol!#ate#

&$er%!!on The 'om$onent o" 'onol!#ate# &$er%!!on !n'le,

'onol!#ate# "!nan'!al tatement !nten#e# "or $&(l!' #!'lo&re, 'onol!#ate#$rent!al re$ort !nten#e# "or &$er%!ory aement o" r!) an#

a$$l!'at!on o" 'erta!n $rent!al re*&lat!on on *ro&$ (a! In #&e 'o&re,

'onol!#ate# &$er%!!on a !ntro#&'e# a(o%e 8o&l# e%ol%e to 'o%er (an) !n

m!7e# 'on*lomerate, 8here the $arent may (e non-"!nan'!al ent!t!e or

$arent may (e "!nan'!al ent!t!e 'om!n* &n#er the :&r!#!'t!on o" other

re*&lator

01 A$$l!'at!on o" a#%an'e# te'hnolo*y

The role o" te'hnolo*y !n (an)!n* !n 'reat!n* ne8 (&!ne mo#el an#

$ro'ee, !n ma!nta!n!n* 'om$et!t!%e a#%anta*e, !n enhan'!n* &al!ty o" r!)

mana*ement ytem !n (an), an# !n re%ol&t!on!+!n* #!tr!(&t!on 'hannel,

'annot (e o%erem$ha!+e# Re'o*n!+!n* the (ene"!t o" mo#ern!+!n* the!r

te'hnolo*y !n"ratr&'t&re, (an) are ta)!n* the r!*ht !n!t!at!%e Gh!le #o!n*

o, (an) ha%e "o&r o$t!on to 'hooe "rom@ they 'an (&!l# a ne8 ytem

themel%e, or (&y (et o" the mo#&le, or (&y a 'om$rehen!%e ol&t!on, or

o&to&r'e A "&rther 'hallen*e 8h!'h (an) "a'e !n th! re*ar# ! to en&re

that they #er!%e ma7!m&m a#%anta*e "rom the!r !n%etment !n te'hnolo*y

an# a%o!# 8ate"&l e7$en#!t&re

an# $!e'emeal

8h!'h m!*ht

o"

ar!e on a''o&nt o"

a#o$t!on o"

/9

&n'oor#!nate# a#o$t!on te'hnolo*yB

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!na$$ro$r!ate !n'on!tent te'hnolo*y an# a#o$t!on o" o(olete te'hnolo*y A

'ae !n $o!nt ! the !m$lementat!on o" 'ore (an)!n* ol&t!on (y ome (an)

8!tho&t ae!n* !t 'ala(!l!ty or a#a$ta(!l!ty to meet 4ael II re&!rement

0 F!nan'!al !n'l&!on

Gh!le (an) are "o'&!n* on the metho#olo*!e o" meet!n* the !n'rea!n*

#eman# $la'e# on them, there are le*!t!mate 'on'ern 8!th re*ar# to the

(an)!n* $ra't!'e that ten# to e7'le rather than attra't %at e't!on o"

$o$&lat!on, !n $art!'&lar $en!oner, el"-em$loye# an# thoe em$loye# !n

&nor*an!+e# e'tor Gh!le 'ommer'!al 'on!#erat!on are no #o&(t !m$ortant,

(an) ha%e (een (eto8e# 8!th e%eral $r!%!le*e, e$e'!ally o" ee)!n*$&(l!' #e$o!t on a h!*hly le%era*e# (a!, an# 'one&ently they ho&l# (e

o(l!*e# to $ro%!#e (an)!n* er%!'e to all e*ment o" the $o$&lat!on, on

e&!ta(le (a! F&rther, e7$er!en'e ha ho8n that 'on&mer? !nteret are

at t!me not a''or#e# "&ll $rote't!on an# the!r *r!e%an'e are not $ro$erly

atten#e# to Fee#(a') re'e!%e# re%eal re'ent tren# o" le%y!n* &nreaona(ly

h!*h er%!'e&er 'har*e an# enhan'ement o" &er 'har*e 8!tho&t $ro$er

an# $r!or !nt!mat!on It ! !n th! 'onte7t that the 6o%ernor, Reer%e 4an) o"

In#!a ha# ment!one# !n the Ann&al Pol!'y Statement 022-21 that R4I 8!ll

ta)e !n!t!at!%e to en'o&ra*e *reater #e*ree o" "!nan'!al !n'l&!on !n the

'o&ntryB ett!n* &$ o" a me'han!m "or en&r!n* "a!r treatment o" 'on&merB

an# e""e't!%e re#real o" '&tomer *r!e%an'e

Hy$othe! Tet!n*

The !ntro#&'t!on o" $rent!al norm !m$ro%e# the "!nan'!al health an#

're#!(!l!ty o" (an)

The ty o" "!nan'!al re"orm an# !t !m$a't on In#!an (an)!n* e'tor !n !t

'ha$ter "o&r to e!*ht ha%e 'ate*or!'ally $ro%e# that the !ntro#&'t!on o"

$rent!al norm !m$lemente# (y the R4I an# *o%ernment thro&*h the

"!nan'!al re"orm $ro'e ha%e !m$ro%e# the "!nan'!al health an# 're#!(!l!ty o"

/12

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all In#!an (an) Th& the a(o%e hy$othe! ha%e (een $ro%e# an#

a''e$te#

03 A *lo(al!+at!on a''elerate, the In#!an "!nan'!al ytem 8!ll alo *et

!nte*rate# 8!th the ret o" the 8orl#

09 A the ta) o" the (an)!n* ytem e7$an#, there ! nee# to "o'& on the

or*an!+at!onal e""e't!%ene o" (an)

/2 It ! &**ete# that, 'or$orate $lann!n* 'om(!ne# 8!th or*an!+at!onal

retr&'t&r!n* (e'ome ne'eary to a'h!e%e !m$ro%ement !n $ro#&'t!%!ty an#

$ro"!ta(!l!ty

/. I&e relat!n* to 'onol!#at!on, 'om$et!t!on an# r!) mana*ement tool are

to (e a#o$te# (y all $r!%ate 'ommer'!al a 8ell a $&(l!' e'tor (an)

/0 Cor$orate *o%ernan'e an# "!nan'!al !n'l&!on 8!ll emer*e a )ey !&e "or

In#!a at th! ta*e o" o'!o-e'onom!' #e%elo$ment

91 SU66ESTIONS FOR FURTHER DEELOPMENT OF 4AN5IN6

SECTOR

A nat!onal $r!or!ty tat& 8!ll ha%e to (e a''or#e# to the "!nan'!al e'tor

re"orm to tren*then the "o&n#at!on o" the In#!an "!nan'!al ytem an# *ear !t

to meet the 'hallen*e o" *lo(al!+at!on The on-*o!n* re"orm $ro'e an# the

a*en#a "or the "&t&re re"orm ha%e to "o'& on ma)!n* the "!nan'!al ytem

%!a(le an# e""!'!ent o that !t 'o&l# 'ontr!(&te to enhan'!n* the 'om$et!t!%ene o"

the real e'onomy an# "a'e the 'hallen*e o" an !n'rea!n*ly !nte*rate# *lo(al

"!nan'!al ar'h!te't&re The "&t&re a*en#a 8o&l# 'erta!nly ha%e a##re to the

"ollo8!n*@

91. POLICIES AND STRATE6IES TO REDUCE HI6H LEEL OF NPAS@

H!*h le%el o" NPA ! the mot 'r&'!al 'hallen*e "a'e# (y the In#!an (an)!n*

e'tor

!n'le@

. Re#&'!n* the e7!t!n* NPA an# '&r(!n* the!r "&rther (&!l# &$

/1.

To ta')le th! $ro(lem, #!""erent o$t!on are a%a!la(le 8h!'h 8o&l#

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0 E7$lor!n* a%en&e o" re'o%er!n* NPA &'h a Lo) A#alat "or re'o%er!n*

maller loan

/ A$$ly!n* an# en"or'!n* the Re%en&e Re'o%ery, 8h!'h ! an e7$e#!t!o&

$ro'e o" a#:!'at!n* 'la!m

> Stren*then!n* the $ro%!!on o" the De(t Re'o%ery A't "or the re'o%ery o"

#&e o" (an) an# FDI

1

In'rea!n* the n&m(er o" De(t Re'o%ery Tr!(&nal

Com$lete (an on *eneral!+e# loan 8a!%er

910 COMPETITION FROM 6LO4AL MAORS@

Another 'hallen*e ! the %ery lar*e n&m(er o" &n-rem&nerat!%e (ran'he, lo8

$ro#&'t!%!ty, o%erta"" an# the ar'ha!' metho# o" o$erat!on All thee "a'tor

ha%e a""e'te# the $ro#&'t!%!ty an# $ro"!ta(!l!ty o" $&(l!' e'tor (an) 6lo(al'om$et!t!on ha (e'ome threat an# mot!%at!on "or In#!an (an) 6o%ernment

ho&l# ha%e the 8ay "or &n!%eral (an)!n* 8!th a three-t!er tr&'t&re "or the

(an)!n* ytem a re'ommen#e# (y the 'omm!ttee

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91 REIEGIN6 THE TAR6ETS FOR PRIORITY SECTOR LENDIN6@

At $reent, !t ! !m$erat!%e to re%!e8 the !tem !n'le# !n $r!or!ty e'tor an#

tar*et o" th! e'tor It ! !m$erat!%e to #e%!e a r&ral 're#!t #el!%ery ytem

8h!'h 8!ll net re&!re lar*e &(%ent!on

911 UALITY OF SERICES@

Ea'h an# e%ery (an) ho&l# $ro%!#e e""!'!ent &al!ty o" er%!'e to 8!n the tr&t

o" the '&tomer $art!'&larly o&r $&(l!' e'tor (an) E-#el!%ery 'hannel ho&l#

(e !ntro#&'e# !n a %ery e""e't!%e manner

91 AUTONOMY IN HRM@

P&(l!' e'tor (an) ho&l# (e *!%en "&ll a&tonomy !n HRM relate# !&e a !t !

*!%en !n $r!%ate an# "ore!*n (an) Th! 8!ll hel$ to "a'e the *lo(al 'om$et!t!on

an# !n'reae the!r e""!'!en'y to $ro%!#e (etter er%!'e to the!r '&tomer913 STRICT RULES FOR ACCOUNTA4ILITY@

R4I ho&l# ma)e tr!'t r&le "or the a''o&nta(!l!ty 8h!'h 8!ll hel$ to !n'reae the

$er"orman'e o" the em$loyee an# hen'e o" (ran'he too a em$loyee 8!th

lo8er $er"orman'e 'an (e $o!nte# o&t an# that o" 8!th *oo# $er"orman'e 'an (e

a8ar#e#

9196LO4ALIQATION OF INDIAN 4AN5S@

In the era o" IT an# GTO, In#!an (an) ho&l# alo ma)e the!r $la'e!ma*e !n

the "ore!*n 'o&ntr!e They ho&l# $ro%!#e the $ro#&'ter%!'e !n "ore!*n

'o&ntr!e a $er the!r #eman# an# e7$e'tat!on

9 SUMMERY AND CONCLUSIONS

The ty ha re%eale# that the "!nan'!al re"orm 8a 'arr!e# o&t !n three ma:or

$hae !e F!rt 6enerat!on

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Re"orm 'o&l# 'reate the )een 'om$et!t!on amon* the (an)!n* e'tor an#

enhan'e# the Role o" Mar)et For'e to #eterm!ne# the rate o" !nteret Th!

$hae alo !n!t!ate# the re%!e8 o" Prent!al Mea&re an# !n!t!ate# e%eral

Int!t&t!onal an# Le*al Mea&re, &$er%!ory Mea&re an#

Relate# Mea&re to tren*then the (an)!n* e'tor !n In#!a

The re"orm $ro'e ha !n'reae# the 'om$et!t!on, o$erat!onal a&tonomy to

P&(l!' Se'tor (an) a 8ell a $r!%ate e'tor (an) The tr&'t&ral 'han*e

ma#e (y re#&'!n* the $&(l!' o8nerh!$ o" $&(l!' e'tor (an) an# !n'reae# the

'a$!tal "rom e&!ty mar)et &$ to >9 o" $a!# &$ 'a$!tal It ha alo $ro%!#e#

more tran$arent Norm relate# to entry, mer*er amal*amat!on an#

*o%ernan'e !&e "or In#!an $r!%ate e'tor, "ore!*n an# :o!nt-%ent&re :o!nt-

(an), N4FC? an# !n&ran'e 'om$an!e The re"orm $ro%!#e# the a''e tothe "ore!*n !n%etment !n the In#!an "!nan'!al e'tor !n the "orm o" Fore!*n D!re't

In%etment

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In e'on# $hae the re"orm (ro&*ht o&t the M!*rat!on to the Internal Rat!n*

4ae#

a#e&a'y, aet &al!ty, mana*ement, earn!n*, l!&!#!ty an# ytem an# 'ontrol=,

Conol!#ate# &$er%!!on o" "!nan'!al 'on*lomerate, Re'at!n* o" the role o"

tat&tory a!tor 8!th !n'reae# !nternal 'ontrol thro&*h tren*then!n* o" !nternal

a!t, Stren*then!n* 'or$orate *o%ernan'e, to "!t an# $ro$er tet "or #!re'tor

alon*-8!th enhan'e# #&e #!l!*en'e on !m$ortant harehol#er

4an)!n* Se'tor Re"orm alo ta)en 'are o" the Te'hnolo*y &$*ra#at!on an# !t

Relate# Mea&re The R4I ha tarte# RT6S, Core 4an)!n* ol&t!on, INFINET

a the 'omm&n!'at!on (a')(one "or the (an)!n* e'tor The Ne*ot!ate# Deal!n*

Sytem

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(an)er All the &''e tor!e o" (an) an# !nno%at!%e er%!'e (e!n* o""ere#

(y the (an) are the *!"t o" "!nan'!al re"orm

4an)!n* Se'tor Re"orm alo ta)en 'are o" the Te'hnolo*y &$*ra#at!on an# !t

Relate# Mea&re The R4I ha tarte# RT6S, Core 4an)!n* ol&t!on, INFINET

a the 'omm&n!'at!on (a')(one "or the (an)!n* e'tor The Ne*ot!ate# Deal!n*

Sytem

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en&re an !nte*rate# a$$roa'h to &$er%!!on o" 'ommer'!al (an) an# "!nan'!al

!nt!t&t!on The Reer%e 4an) ha# !nt!t&te# a tate o"-the-art O""-!te Mon!tor!n*

an# S&r%e!llan'e

A''o&nt!n* tan#ar# an# #!'lo&re norm 8ere tren*thene# 8!th a %!e8 to

!m$ro%!n* *o%ernan'e an# (r!n*!n* them !n al!*nment 8!th the !nternat!onal

/1

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norm The #!'lo&re re&!rement (roa#ly 'o%ere# 'a$!tal a#e&a'y, aet

&al!ty, mat&r!ty #!tr!(&t!on o" ele't !tem o" aet an# l!a(!l!t!e, $ro"!ta(!l!ty,

'o&ntry r!) e7$o&re, r!) e7$o&re !n #er!%at!%e, e*ment re$ort!n*, an#

relate# $arty #!'lo&re In A$r!l 022, 'ommer'!al (an) 8ere a#%!e# to $&t !n

$la'e (&!ne 'ont!n&!ty mea&re, !n'l!n* a ro(&t !n"ormat!on r!)

mana*ement ytem 8!th!n a "!7e# t!me "rame

In %!e8 o" the !n'rea!n* #e*ree o" #ere*&lat!on an# e7$o&re o" (an) to

%ar!o& ty$e o" r!), the Reer%e 4an) !n!t!ate# mea&re "or "&rther

tren*then!n* an# "!ne-t&n!n* r!) mana*ement ytem !n (an) The *&!#el!ne

on aet-l!a(!l!ty mana*ement an# r!) mana*ement ytem !n (an) 8ere

!&e# !n .999 an# 6&!#an'e Note on Cre#!t R!) Mana*ement an# Mar)etR!) Mana*ement !n O'to(er 0220 an# the 6&!#an'e Note on O$erat!onal r!)

mana*ement !n 022 In the Reer%e 4an), the r!)-(ae# a$$roa'h to

&$er%!!on ha (een a#o$te# !n'e 022/ an# a(o&t 0/ (an) ha%e (een

(ro&*ht &n#er the "ol# o" r!)-(ae# &$er%!!on

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'om$et!t!on !n the (an)!n* e'tor, "ore!*n #!re't !n%etment !n the $r!%ate e'tor

(an) ! no8 allo8e# &$ to > $er 'ent, &(:e't to 'on"orm!ty 8!th the *&!#el!ne

!&e# "rom t!me to t!me The re*&latory "rame8or) !n In#!a, !n a##!t!on to

$re'r!(!n* $rent!al *&!#el!ne an# en'o&ra*!n* mar)et #!'!$l!ne, !

!n'rea!n*ly "o'&!n* on en&r!n* *oo# *o%ernan'e thro&*h "!t an# $ro$er

o8ner, #!re'tor an# en!or mana*er o" the (an) Tran"er o" harehol#!n* o"

"!%e $er 'ent an# a(o%e re&!re a')no8le#*ement "rom the Reer%e 4an) an#

&'h !*n!"!'ant harehol#er are re&!re# to meet r!*oro& J"!t an# $ro$er

re&!rement 4an) ha%e alo (een a)e# to en&re that the nom!nate# an#

ele'te# #!re'tor are 'reene# (y a nom!nat!on 'omm!ttee to at!"y J"!t an#

$ro$er 'r!ter!a D!re'tor are alo re&!re# to !*n a 'o%enant !n#!'at!n* the!r

role an# re$on!(!l!t!e The Reer%e 4an) ha !&e# #eta!le# *&!#el!ne ono8nerh!$ an# *o%ernan'e !n $r!%ate e'tor (an) em$ha!+!n* #!%er!"!e#

o8nerh!$

The mooth "&n't!on!n* o" the $ayment an# ettlement ytem ! a $re-re&!!te

"or "!nan'!al ta(!l!ty The Reer%e 4an), there"ore, ha ta)en e%eral mea&re

"rom t!me to t!me to #e%elo$ the $ayment an# ettlement ytem !n the 'o&ntry

alon* o&n# l!ne The 4oar# "or Re*&lat!on an# S&$er%!!on o" Payment an#

Settlement Sytem

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"or all the trana't!on an# *&arantee (oth the e'&r!t!e an# "&n# le* o" the

trana't!on Un#er the D%PIII mo#e o" ettlement that ha (een a#o$te#, (oth

the e'&r!t!e le* an# the "&n# le* are ettle# on a net (a! The ettlement

thro&*h CCIL ha th& re#&'e# the *ro #ollar re&!rement (y more than 92 $er

'ent A 'reen-(ae# ne*ot!ate# &ote-#r!%en ytem "or #eal!n* !n the

'allnot!'e an# the term money mar)et

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Gh!le #ere*&lat!on ha o$ene# &$ ne8 o$$ort&n!t!e "or (an), l!(eral!+at!on ha

!nten!"!e# 'om$et!t!on !n the (an)!n* !n#&try (y o$en!n* the mar)et to ne8

"ore!*n an# $r!%ate e'tor (an) De'l!n!n* !nteret rate an# re#&'e# len#!n*

mar*!n ha%e thro8n &$ ne8 'hallen*e to (an), $art!'&larly $&(l!' e'tor

(an)

4an) nee# to e&!$ themel%e &""!'!ently to o$erate !n &'h a 'om$et!t!%e

en%!ronment

6LO4AL CHALLEN6ES IN 4AN5IN6

. Enhan'ement o" '&tomer er%!'e

0 Inno%at!on !n te'hnolo*y/ Im$ro%ement o" r!) mana*ement ytem

> D!%er!"y!n* $ro#&'t

6lo(al!at!on 'hallen*e are not retr!'te# only to *lo(al (an) 4an) !n In#!a

alo nee# to "a'e them O%er'om!n* thee 'hallen*e ma)e them more

'om$et!t!%e an# 8!ll alo e&!$ them to la&n'h themel%e a *lo(al $layer

COMPETITION

6lo(al!at!on ha (ro&*ht "!er'e 'om$et!t!on "rom !nternat!onal (an) In or#er to

'om$ete 8!th ne8 entrant e""e't!%ely 'ommer'!al (an) nee# to $oe tron*

(alan'e heet 8h!'h !n#!'ate the real tren*th o" the (an) The entry o" ne8

$r!%ate e'tor (an) an# "ore!*n (an) e&!$$e# 8!th latet te'hnolo*y an#

te'hnolo*y -#r!%en $ro#&'t l!ne ha%e really en!t!+e# the or#!nary '&tomer o"

the (an)!n* er%!'e to the nee# "or &al!ty !n term o" !nno%at!%e $ro#&'t a

8ell a #el!%ery $ro'e Thee (an) are a**re!%ely tar*et!n* the reta!l

(&!ne an# 'one&ently *ra((!n* the mar)et hare o" $&(l!' e'tor (an)

ELECTRONIC 4AN5IN6

In the "&t&re, (an)!n* 8!ll (e #r!%en more o" te'hnolo*y an# tele'omm&n!'at!on

ytem A!#e# (y !m$ro%e# tele'omm&n!'at!on an# te'hnolo*y, P&(l!' e'tor

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(an) ha%e ma#e ra$!# tr!#e !n $ro#&'t !nno%at!on an# #el!%ery, there(y

!m$ro%!n* &al!ty o" '&tomer er%!'e Te'hnolo*!'al 'han*e ha%e (ro&*ht

a(o&t $ara#!*m h!"t !n the $ro'e to#ay (an)!n* may (e re#e"!ne# a Tr!$le

A (an)!n*-anyt!me any8here, anyho8 (an)!n* Internet (an)!n* 8!ll ena(le

three $ro"!t 'entre, namely trea&ry, 'or$orate (an)!n* an# reta!l (an)!n*, to

la&n'h ne8 $ro#&'t an# $ro%!#e &al!ty er%!'e to a 8!#er '&tomer (ae

TECHNOLO6Y

G!th the hel$ o" !nno%at!%e !n"ormat!on te'hnolo*y, (an) are a(le to re#&'e the

trana't!on 'ot an# han#le a lar*e n&m(er o" trana't!on !n no t!me No8 (an)

'an $ro%!#e '&tom!+e# $ro#&'t ea!ly an# '&tomer 'o&l# a''e many

er%!'e thro&*h !nternet (y !tt!n* at home To $ro%!#e (etter er%!'e to the!r

'&tomer, (an) are em(ra'!n* C&tomer Relat!onh!$ Mana*ement CRM

"a'!l!tate# (y the a%a!la(!l!ty o" 'on#&'t!%e te'hnolo*y Inno%at!on ! te'hnolo*y !

alo hel$!n* (an) to 'ro ell the $ro#&'t o" !n&ran'e an# e'&r!t!e "!rm,

8h!'h are 8ell!n* the!r "ee-(ae# !n'ome !n the total !n'ome

Inno%at!%e te'hnolo*y not only (r!n* (ene"!t, (&t r!) too Ma:or !m$e#!ment

an# r!) ao'!ate# 8!th the !m$lementat!on o" !nno%at!%e te'hnolo*y areB

Cot ao'!ate# 8!th a#o$t!on o" ne8 te'hnolo*y m!*ht not (r!n* 'ah "lo8

re&!re# to 'o%er that 'ot

In'reae# 'a$a'!ty #&e to a ne8 te'hnolo*y 'o&l# re&lt e7'e 'a$a'!ty !n the

"!nan'!al !nt!t&t!on

Another $ro(lem (an) "a'e 8!th !m$lementat!on o" latet te'hnolo*y !

!nte*rat!on o" e7!t!n* ytem 8!th the ne8 one

4an) 'o&l# "a'e 'ot o%err&n or 'ot 'ontrol $ro(lem

Inno%at!%e te'hnolo*y ha (ro&*ht ne8 r!) l!)e #ayl!*ht o%er#ra"t r!)

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INNOATIONS IN HOUSIN6 LOANS

Ho&!n* loan are one o" the $ro#&'t that (an) are 'on'entrat!n* more The

(oom!n* ho&!n* loan mar)et $o!t!%ely a""e't many !n#&tr!e So to $ro%!#e

!m$et& to any e'onomy, (oom!n* ho&!n* mar)et ! %!tal 4an) (ene"!t "romh!*her e'&r!ty ,lo8 r!) 8e!*ht an# reaona(le mar*!n

RIS5 MANA6EMENT

6lo(al!+at!on an# l!(eral!+at!on are "or'!n* (an) to ta)e more r!) to 'om$ete

e""e't!%ely !n the *lo(al mar)et $la'e One o" the !m$ortant r!) ! 'om$l!an'e

r!) It ! the r!) to 'om$ly 8!th la8, r&le an# tan#ar# &'h a mar)et

'on#&'t, treat!n* '&tomer "a!rly, et' To m!t!*ate th! r!), (an) ho&l# #e%elo$'om$l!an'e '&lt&re !n the!r or*an!+at!on It ! not only the #&ty o" 'om$l!an'e

$e'!al!t, (&t (an) 'an alo mana*e 'om$l!an'e r!) (y $&tt!n* !n $la'e

'om$l!an'e "&n't!on that are !n 'on!ten'e 8!th 'om$l!an'e $r!n'!$le

L!&!#!ty r!) ar!e 8hen (an) &na(le to meet the!r o(l!*at!on 8hen they

(e'ome #&e To mana*e the m!mat'h o" aet an# l!a(!l!t!e, (an) ho&l#

analye the a''o&nt!n* #ata (oth on tat!' a 8ell a #ynam!' (a! De$o!t o"

h!*her %al&e are the mot !m$ortant !tem to (e mon!tore# re*&larly, a #en

8!th#ra8al o" thee #e$o!t m!*ht 'a&e l!&!#!ty $ro(lem "or the (an) Alo

!n'ent!%e to thee #e$o!t !n the t!me o" "all!n* !nteret rate 'o&l# 'reate tra!n

on l!&!#!ty

INNOATIONS IN CUSTOMER SERICES

Sat!"!e# '&tomer ! the (et *&arantee "or ta(!l!ty o" the or*an!+at!on !n the

lon*-r&n 4an) 'an at!"y the!r '&tomer only (y $ro%!#!n* '&tom!e#, 'ot

e""e't!%e an# t!mely er%!'e G!th the hel$ o" te'hnolo*y (an) are a(le to

$ro%!#e $lethora o" $ro#&'t an# er%!'e to the!r '&tomer 8h!'h &!t them

Ma:or er%!'e $ro%!#e# (y the In#!an (an) that are o" !nternat!onal tan#ar#

are Any t!me (an)!n*, Any8here (an)!n*, 6lo(al ATM an# Cre#!t Car#, Internet

(an)!n* "a'!l!ty et'

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93 CONCLUDIN6 REMAR5S @

6!%en the ne8 en%!ronment, In#!an (an) 'ant rema!n &na""e'te# (y the

'han*e ro&n# an# 'hallen*e (e"ore them There"ore In#!an (an) nee# to

retr&'t&re themel%e The "ollo8!n* $ra't!'e nee# to (e a#o$te# on &r*ent(a!B

6reater $ro"e!onal!m

6reater em$ha! on #!%er!"!'at!on an# o&r'e non !nteret !n'ome

Con&ltan'y er%!'e

E&!$$!n* themel%e to o$erate !n the #ere*&late# en%!ronment

Ne'eary 'han*e !n the le*al t!$&lat!on

Cot mana*ement

4en'h mar)!n* o" er%!'e tan#ar# to !m$ro%e $ro#&'t!%!ty an# Pro"!'!en'y

A el"- re*&latory or*an!+at!on to mon!tor the a't!%!t!e o" (an)!n*

G!th the !n'rea!n* le%el o" 6lo(al!at!on L!(eral!at!on, Pr!%at!at!on an# ne8

re"orm o" the In#!an (an)!n* e'tor, 'om$et!t!on 8!ll !nten!"y "&rther There"ore,

the (an) 8ho &n#ertan# the mar)et #ynam!', $er'e!%e threat, ant!'!$ate

%olat!l!ty, ho8 h!*h #e*ree o" $ro"e!onal!m an# #ynam!m !n the!r "&n't!on!n*

an# re$on# $rom$tly to the mar)et nee# 8o&l# &r%!%e an# $ro$er

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A44REIATION

A4 ANDHRA 4AN5

AE4C AMERICAN EPRESS 4AN5IN6 CORPORATION

AE4L AMERICAN EPRESS 4AN5 LIMITED

ALCOS ASSET LIA4ILITIES MANA6EMENT COMMITTEE

ARF ASSET RECONSTRUCTION FUNDS

ATM AUTOMATIC TELLER MACHINE

4O4

4OI

4AN5 OF 4ARODA

4AN5 OF INDIA

4OM 4AN5 OF MAHARASTRA

CAMELS CAPITAL ADEUACY, ASSET UALITY,MANA6EMENT,

EARNIN6S, LIUIDITY AND SYSTEM CONTROLS

C4 CENTRAL 4AN5

C4OI CENTRAL 4AN5 OF INDIA

CD

CFS

CERTIFICATE OF DEPOSITS

@ COMMITTEE ON FINANCIAL SYSTEM

CO4 CORPORATION 4AN5

CRAR CAPITAL TO RIS5 ASSET RATIO

CRR CASH RESERE RATIO

D4 DEELOPMENT 4AN5

DFHI DISCOUNT AND FINANCE HOUSE OF INDIA

DFI DEELOPMENT FINANCIAL INSTITUTIONS

DIC6C DIPOSIT INSURANCE AND CREDIT 6URANTEE

CORPORATION

EGS EARLY GARNIN6 SYSTEM

/

F4

FII

FI

FOREI6N 4AN5S

FOREI6N INSTITUIONAL INESTORS

FINANCIAL INSTITUTIONS

HRM HUMAN RESOURCE MANA6EMENT

I4

I4A

INDIAN 4AN5

@ INDIAN 4AN5S ASSOCIATION

ICFAI @ INSTITUTE OF CHARTERED FINANCIAL ANALYST OF INDIA

ICICI INDUSTRIAL CREDIT AND INESTMENT CORPORATION OF INDIA

ICRA INTERNATIONAL CREDIT RATIN6 A6ENCY

ID4I INDUSTRIAL DEELOPMENT 4AN5 OF INDIA

THE INDIAN FINANCIAL NETGOR5INFINET

IO4 INDIAN OERSEAS 4AN5

IPSS INTE6RETED PAYMENT AND SETTLEMENT SYSTEM

IRDA INSURANCE RE6ULATORY AND DEELOPMENT AUTHORITY

LAF

N4

LIUIDITY ADUSTMENT FACILITY

NATIONALISED 4AN5S

NPA NON PERFORMIN6 ASSETS

NSE NATIONAL STOC5 ECHAN6E

O4OC ORIENTAL 4AN5 OF COMMERCE

OMO OPEN MAR5ET OPERATIONS

OSMOS

P4

OFFSIDE MONITORIN6 AND SUREILLANCE

PRIATE 4AN5S

PN4 PUNA4 NATIONAL 4AN5

PNS4 PUNA4 AND SINDH 4AN5

PS4 PU4LIC SECTOR 4AN5S

/1

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R4I RESERE 4AN5 OF INDIA

ROA RETURN ON ASSET

ROE RETURN ON EUITY

SARFAESI SECURITIQATION AND RECONSTUCTION OF FINANCIAL

ASSETS AND ENFORCEMENT OF SECURITY INTEREST

S4 SYNDICATE 4AN5

S44 STATE 4AN5 OF 4I5ANER AND AIPUR

S4I STATE 4AN5 OF INDIA

S4OH STATE 4AN5 OF HYDERA4AD

S4OI STATE 4AN5 OF INDORE

S4OM STATE 4AN5 OF MYSORE

S4OP STATE 4AN5 OF PATIALA

S4OS STATE 4AN5 OF SAURASTRA

S4OT STATE 4AN5 OF TRAAN5ORE

SC4 SCHEDULED COMMERCIAL 4AN5S

SE4I SECURITY AND ECHAN6E 4OARD OF INDIA

SLR STATUTORY LIUIDITY RATIO

STCI SECURITY TRADIN6 CORPORATION INDIA

U4OI UNITED 4AN5 OF INDIA

UCO UNITED COMMERCIAL 4AN5

UN4OI UNION 4AN5 OF INDIA

UTI

aR

4

UNIT TRUST OF INDIA

ALUE AT RIS5

IAYA 4AN5