Chennai: Union Finance Minister P Chidambaram on Saturday said India needs at least one or two "world size" banks that can compete with other global banks like in China, which has three among the top 20 banks in the world. (Agencies)
"Banks in the country are governed by a sound financial system, rules and a very strong regulator. India now needs at least one or two world size banks that can compete with global banks. China today has three banks among the top 20 (of the world). India has none," he said at a function here.
"We need world size banks and therefore at every opportunity I plead there has to be consolidation," he said.
Though the sound financial system had seen banks in India overcome the European crisis in 2008-09, none of them were present among the top 20 banks of the world, he said.
Chidambaram pointed out that during the crisis, 1,000 banks had collapsed in the US, starting with Lehmann Brothers, but in India, not even one bank collapsed, whether it was in public sector, private sector or banks with national or regional footprints.
The minister said India needs all kinds of banks like cooperative banks serving a cluster of village panchayats. "We need banks with a very pronounced local flavour. The State Bank of Bikaner which I visited this morning has a very strong Rajasthan flavour."
"About 80 per cent of its branches are in Rajasthan. People of Rajasthan look up to the bank as their own bank. That is how it should be. We also need a bank dominating a region of this country. We have banks dominating the East and West. Punjab National Bank dominates in North and North West region and Indian Bank and Indian Overseas Bank in Tamil Nadu," he said.
Besides, banks should always have a national footprint like State Bank of India, he said, adding other banks are now following SBI.
Chennai: Union Finance Minister P Chidambaram on Saturday said India needs at least one or two "world size" banks that can compete with other global banks like in China, which has three among the top 20 banks in the world.