Finance Minister vows to brings public sector banks on par with its global peers

Chennai:

Union Finance Minister Pranab Mukherjee vowed to bring the country’s banks on par with its global peers and said the government is committed to keep all the public sector banks adequately capitalized for the year 2012-13.

Speaking after inaugurating the new corporate office building of Indian Bank at Llyods Road in Chennai on Friday, the Finance Minister said draft guidelines on Basel III capital regulations which envisage stringent norms for capital adequacy have been released for implementation from January 1, 2013 and it will be fully phased in by January 1, 2019.

His statement comes in the wake of banks across the world switching over to Basel III accords for disclosing the size and quality of their capital safety buffers from 2013 to help reassure investors they are stable.

The finance minister said the government has committed for maintaining a minimum of eight per cent Tier-I capital in all public sector banks which is over and above the regulatory requirement of six per cent.

“Extra provision/ buffer required under Basel III will also be taken care of and for the year 2012-13 also, the government is committed to keep all the public sector banks adequately capitalized,” Mukherjee said.

The minister also hailed Indian Bank for its financial inclusion drive in Puducherry covering below 2,000 population villages. “It is indeed laudable that 1,511 villages allotted to Indian Bank with 2,000 plus population for 2011-12 have already been covered under financial inclusion,” he added.

He said the large dependence of poor on money lenders cannot be overcome without improved access of the poor to financial intermediation. “All banks have been directed to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012 using various models and technologies including branchless banking,” he said.

The minister also launched the e-lounge, WAP enabled mobile banking facility and online loan application system for making online application for education loan and home loan schemes of Indian Bank. T M Bhasin, chairman and managing director of Indian Bank said the bank has announced that financing of self-help groups will now be done by cash credit system replacing the term loan system.

Central Vigilance Commission vigilance commissioner J M Garg, Deputy Governor of Reserve Bank of India K C Chakrabarty, board of directors of the bank and various other dignitaries were present on the occasion.

Box:

The idea, design and architecture of the new Indian Bank corporate office was conceived by Deputy Governor of Reserve bank of India K C Chakrabarty, who was then chairman and managing director of Indian Bank in 2006-07.

The corporate office is constructed in an area of 36.40 grounds and the built up area is 1,85,000 square feet including 55,000 square feet of basement area.

The green and energy efficient building is circular in shape and the outer face is of energy efficient glass. It resembles the logo of the bank. Nerve center of the building is atrium which is covered with glass at top allowing ample light. The atrium has a fountain, capsule lift and interconnecting corridors.