Banks urged to look at SMEs

Banks should give more credit to small and medium enterprises in the present financial crisis, said experts at a seminar on banking industry, organised by the Confederation of Indian Industries (CII), in Kolkata on Wednesday.

Speaking at the seminar, K C Chakrabarty, chairman and managing director, Punjab National Bank said the present crisis was the result of crisis of confidence, rather than crisis on liquidity.

Industries should be prepared for an high interest regime, as the dependence on domestic banks by corporates have increased in the recent months.

This was mainly because of the unavailability of overseas credit. Speaking at the seminar, Renu Challu managing director of State Bank of Hyderabad (SBH), said banks have a critical role to play at the present time of financial crisis.

According to Prasant Saran, Chief General Manager in Charge, Reserve Bank of India, “Banks are regarded as less sensitive as they are less risky for the members of the public. Banks must be strong and safe. Banks are regulated all over the world, the most important feature of Basen II norms is that it ensures as a statistical approach to risk management and others. There is a very strong theoretical ground on managing capital.”