Banking Challenges

Both The Reserve Bank and the banking system deserve kudos for their mighty performance and demonstrating to the world Financial system as to how to survive the varieries of risks banks are exposed to in these days of liberalisation, emergence of exotic products and linkages with various markets. This should not, however, make them complacent and sit on laurels. The challenges ahead are different and they have to be prepared with different skills,knowledge and dynamism to continue to perform better and remain sound and healthy.

The major challenge would be in the area of operational risk and risks arising from international markets involving liquidity, interest and forex risks. Asset -Liability mismatch will be another area of serious concern for Indian banks to deal with. In the absence of adequate attention to develop the human resources to meet the challenges ahead, any sound regulatory system will not prove to be of any help. Human Resources management particularly in Public Secor banks needs a boost and this itself will be a challenge as the cost to train and retain them would be something enormous.The advantages of being in public sector cannot be expected to remain so in a competitive atmosphere and should not be so to provide a level playing field to the private sector.


Dr.T.V.Gopalakrishnan

An edited version of this appeared in Business Line Dt,30/03/10