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Mukherjee asks banks to get ready for global competition
New Delhi, Sep 7 (IANS):
Published on 7 Sep. 2010 9:40 PM IST
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Indian banks need to gear themselves up for global competition as changing economic scenario might prompt the government to further open up the sector to foreign players, Finance Minister Pranab Mukherjee said Tuesday.
“Indian banks have performed quite well. Their profitability is good. But this is not at par with the global players,” Mukherjee said at a Bank of India event. He said Indian banks could improve competitiveness through technological innovation and sustaining high earnings and profitability.
“Global banking landscape is changing very fast. Indian banks should use this opportunity to carve out a place for themselves at the global platform,” Mukherjee added. The government has indicated that it might open up Indian banking sector for more foreign competition.
Foreign direct investment limit in Indian banks are likely to be raised further and more foreign players are likely to be allowed to operate from the country.
Interestingly, nearly 1 million employees of Indian banks, especially public sector banks, are on a day-long strike Tuesday to protest against a host of issues, including the entry of foreign banks and foreign direct investments in banks.
Currently, 49 percent foreign direct investment is allowed in banks through automatic route and a further 25 percent through approval of the foreign investment promotion board, taking the total to 74 percent.

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