ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Emerging Reforms in Indian Banking-International Perspectives

Emerging Reforms in Indian Banking International Perspectives Urjit R Patel This paper discusses some important reforms that will need to he implemented soon if Indian banking is to be put on a sound footing against a background of increasing global integration of the Indian economy (in both real and financial terms). The policies, drawing on international experience, are informed by the following objectives: (i) to enhance the flexibility of banks to respond effectively to changing circumstances (volatility); and (ii) to ensure the sustainability of the restitution of public sector banks. The measures discussed include maintaining a higher capital adequacy ratio; facilitating restructuring of the sector by formulating an exit and privatisation policy; implementing stricter and more transparent accounting and disclosure norms; and enhancing rule-based supervision.

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