Policy rejig for more funds

Mumbai, June 4: The government is willing to re-examine policies so that banks can raise fresh capital to fund their expansion plans, Union finance minister P. Chidambaram today said at the bicentennial celebrations of State Bank of India (SBI).

“Domestic banks and leading trading companies will carry the national flag abroad,” he said. He also encouraged SBI to grow internationally.

He praised SBI for its contribution to the economy and added that the bank had the necessary capacities and strengths to penetrate deep into rural India and grow global.

“I want to see the SBI logo in every capital of the world. For this, it will require new capital (funds). It (acquiring new capital) can only happen if we examine the current policies and restrictions. I hope we are able to do so in the next few months,” Chidambaram said.

The finance minister reiterated that banks must expand credit to fuel growth. While they must find new capital to meet international norms and comply with regulatory requirements, domestic banks should also finance international trade, which is expected to touch the $200-billion mark, Chidambaram said. However, for this, banks would need size and presence to support the growing volume of international trade.

“We aim to make the economy grow at 8 per cent or more. I have said India will grow at 5 per cent even if there is no government, 6 per cent if there is a good monsoon, 7 per cent if there is a reasonable and non-interfering government and 8 per cent if there is a pro-active one. That’s the kind of government we want to offer,” the finance minister said.

Banks have to become multi-product financial centres to sell a range of products like insurance and pension schemes, he added.

Expressing confidence that SBI will set new standards, the finance minister asked banks to adopt best practices and good governance norms to achieve them.

Earlier, he had met industrialists, namely Rahul Bajaj, Mukesh Ambani, Adi Godrej and Shashi Ruia.