By IANS,
Mumbai : A sound and resilient banking sector, well-functioning financial markets, robust liquidity management and payment and settlement infrastructure have become the pre-requisites for financial stability, union Finance Minister Pranab Mukherjee said here Sunday.
Speaking at the second Sir Sorabji Pochkhanawala Memorial Lecture organised by the state-owned Central Bank of India, Mukherjee said the global financial crisis has compelled the policy makers to rethink some of the principles of economic management.
“In the post-crisis period, financial stability and the banking system have become integral part of policy discussions and macroeconomic objectives in the developed and the developing world,” he said.
“We have seen how unfettered growth of the financial sector can have dangerous implications — both in the developed and the developing worlds,” he added.
Mukherjee observed that the fact that India has not gone through any financial turbulence and survived the global crisis reflects the mature economic management of the country.
“Today, it’s well established that our commercial banks are well regulated, vibrant, fast-growing and match the global best practices in capital adequacy, risk management and business growth,” he said.
He lauded the Indian banks for doing a commendable job in meeting the vast banking and credit requirements of an economy growing at around nine percent in the last few years.
Mukherjee, however, regretted that the fruits of banking have not been distributed universally.
“Financial inclusion is a key determinant of sustainable and inclusive growth, which in turn is essential for building an equitable society. A major unfinished task in this context is to promote greater financial literacy and investor protection,” he said.
Mukherjee also launched the ‘Cent Kisan Gold Card’, an initiative of the Central Bank of India. The smart card aims to provide single window hassle-free financial support to farmers for farm and non-farm activities.
Sir Sorabji Pochkhanawala had founded the Central Bank of India Dec 21, 1911. It was claimed to be the first Indian commercial bank completely owned and operated by Indians. The Indian government nationalised the bank, along with 13 others, in 1969.