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Banks fully equipped to manage contingencies: Jalan

The Reserve Bank of India Governor, Bimal Jalan, said on Monday that Indian banking and financial system, despite some weak links, has acquired sufficient resilience to manage change as well as unforeseen contingencies, domestic and international.

"We have also made progress in equipping ourselves with technical and professional inputs to cope with the increasing complexities of global finance," Jalan said at the inuauguration of 23rd Bank Economists' Conference in Kolkata.

Jalan, however, suggested to the gathering of CEOs of scheduled commercial banks to chalk out separate set of prudential norms and standards in view of vast differences in the size of Indian banks, and their asset liability profile, operationalising the new capital adequacy requirement taking into account the specific situation of each institution.

He suggested the banks form a 'core team' of 4-5 middle level officials with adequate technical background to work out a corporate strategy for implementing the new guidelines within each bank.

The RBI Governor said at the corporate level, several banks have made substantial progress in improving their internal management and control systems while at the policy level, the government and the apex bank were fully committed to moving forward with financial reforms with further deregulation and development of financial markets.

Jalan said the industry, however, will have to accept and implement within a prescribed time-frame internationally recognised prudential norms and standards.

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