[1]The finance minister, Mr Pranab Mukherjee, on Monday said the country’s opposition to a global bank tax to fund bailouts and its support to prudential regulations to avert financial meltdowns in future have been “by and large accepted” by the G-20 finance ministers.
“We are not in favour of having taxation on the banks. We suggested that ultimately you please take it up through the regulatory route. By and large, it was accepted,” Mr Mukherjee told reporters here on Monday a day after his return from the G-20 ministerial at Busan in South Korea. Besides India, Australia and Canada are also opposed to the proposal to tax banks, while the European Union, the US, and Britain favour the idea.
Even as the G-20 communique did not directly mention bank tax, it called for contribution from the financial sector players to the measures taken by governments to prop up economies so that taxpayers can be protected from funding future bailouts.
Mr Mukherjee said our way of regulating the banking system can help the developed world prevent bank failures. “We have regulatory tools such as Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) through which we regulate our banks, and if there is a well-placed regulatory mechanism, perhaps the type of problems which European and American banks are facing could be avoided,” the finance minister said.
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