India needs more global-sized banks to achieve $5 trillion economy goal: CEA
KOLKATA/NEW DELHI: Chief economic adviser K V Subramanian on Sunday said that India needs more global sized banks to help the country achieve $5 trillion economy by 2024-25.
He rued the fact that India has only one bank in top 100 global bank list while a country much smaller in size has more such banks.
State Bank of India (SBI) at the 55th position is the only bank in the global top 100 list. China has 18 banks while the US has 12 in the list.
"India is the fifth largest economy in the world. So, if the Indian banking sector was proportional to the size of its economy, India should have been where South Korea is, which has six banks in the global top hundred. But in contrast, India has only one bank in the global top hundred," he said.
Even countries that are a fraction of India's size for example Finland, Denmark, Belgium, Austria, Norway have at least one bank in the global top hundred, he said while delivering a lecture at the fifth anniversary event of Bandhan Bank.
"If you take countries like Sweden and Singapore, Sweden is one-sixth the size of the economy, Singapore is one-eighth the size of the economy, they have three banks in the global top hundred," he said.
Subramanian said that "like cricketer M S Dhoni who had shown the country how to win in the foreign shores, the Indian banking system also needs to scale up to global standards".
苏布兰马尼安表示，“就像板球运动员M S Dhoni展示了如何在海外取胜一样罪魁祸首，印度的银行系统也需要向全球々标准升级。”
"The Indian banking system needs to conquer the world. Rather being tigers at home, it should scale up its presence in the world rankings where China is leading in terms of the number of banks, followed by the US," he said.
That's what should now be the goal of the Indian banking sector, because India is not any more a small economy but the fifth largest economy in the world, he said.
"So, the basic point I'm trying to make here is that now in order for India to become a $5 trillion economy, the banking sector needs to be proportional at least proportional to the size of its economy, if not bigger than the proportionality," he said.
In addition to global sized banks, the chief economic adviser said India needs more banks. For instance, he said the US, which is one third of India in terms of population, has 20 times more banks.
More banks will enhance competition in banking and bring down the cost for consumers, he said.
Laying emphasis on adoption of technology, he said there is also a need to focus more on data analytics, artificial intelligence and machine learning as banking has become more technology driven.
Citing a study, Subramanian said technology can play a key role in both scale, and quality of lending.
By investing in data analytics and technology, it is possible to actually defeat the nefarious designs of wilful defaulters by using proper data, because there are enough leading indicators available, he added.
译文来源：三泰虎 /p/50665.html 译者：Jessica.Wu
Sell yes bank
But Global sized Bank must be out of Political control. Govt should not go on instructing Banks to disburse interest free loan, loan to certain industry , Govt should not go on instructing RBI for a rate cut. Interest free loan has spike number of Bad loans
Dr Subramanian, are you saying 'bigger the better' and too big to fail? first of all, let the banks fix their fundamentals. they are saddled with too much NPAs. it's OK if the banks are not big at the international standards.
Stop distributing free loans from banks to big industrialists as they are freely moving out of country with peoples hard earned money from banks.
Global sized banks = Global sized NPAs.....
India needs more entrepreneurs. Banks can only lend money. But if the business idea is not good or the business is not run properly, then the same loan turns into a NPA. India has seen a drought of good business ideas. Very few good new companies have come up after 2008.
Good thought.....honest statement, come out of bubbles fellow indians, population without money will be mopped like croaches aas world grows dense......be very careful and agressive with future...
Not more banks. More banks will be more chaos and we can never compete with Chin!
open a new bank IBI international bank of india...
All banks are sick in your rule and about to call, so stop this rubbish
we must now forget $5 trillion now..not even close by 2024
What India needs to achieve the targets are these: honest political leaders, free of co ption and committed to wiping out co ption with immediate effect. Without this, the country will remain backward forever. When is that going to happen? Soon? Never?