Banks may be indirectly affected by euro-zone crisis: Survey

Though Indian banks' exposure to the troubled euro zone is negligible, funding pressure could impact them, Economic Survey 2011-12 today said.

"The recent regulatory prescriptions for European banks have raised fears of deleveraging. Indian banks are not expected to bear any direct impact on account of their negligible exposure to the troubled zone," the survey tabled by Finance Minister Pranab Mukherjee on Thursday in the Parliament said.

"However, they could be indirectly affected on account of funding pressures," it said. The scope for countercyclical financial policy could be explored in financial regulations in order to minimise negative impact of accumulated financial risks, it said.

This will go a long way in providing needed stability to the financial system, it added. The survey noted sovereign risk concerns, particularly in the euro area, affected financial markets for the greater part of the year, with the contagion of Greece's sovereign debt problem spreading to India and other economies by way of higher-than-normal levels of volatility.

Despite the demanding operational environment, it said, the Indian banking sector demonstrated continued revival from the peripheral spill over effects of the recent global financial turmoil.

Highlighting the importance of financial inclusion in the financial sector, the Survey said it is seen as an important determinant of economic growth.

Banks need to take into account various behavioural and motivational attributes of potential consumers for a financial inclusion strategy to succeed, it said.

Besides, it said, access to financial products is constrained by lack of awareness, unaffordable products, high transaction costs, and products which are not customised and are of low quality.

A major challenge in the times ahead would be to meet financing requirements, particularly of the unorganised sector and the self-employed in the micro and small business sector, it said.

Post new comment

<form action="/comment/reply/134140" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: &lt;a&gt; &lt;em&gt; &lt;strong&gt; &lt;cite&gt; &lt;code&gt; &lt;ul&gt; &lt;ol&gt; &lt;li&gt; &lt;dl&gt; &lt;dt&gt; &lt;dd&gt;</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-de3cf73b47a181ad98c30c8f58e7cade" value="form-de3cf73b47a181ad98c30c8f58e7cade" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="86396827" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>

No Articles Found

No Articles Found

No Articles Found

I want to begin with a little story that was told to me by a leading executive at Aptech. He was exercising in a gym with a lot of younger people.

Shekhar Kapur’s Bandit Queen didn’t make the cut. Neither did Shaji Karun’s Piravi, which bagged 31 international awards.