The profitability of the Indian banking sector will come under pressure due to intense competition and expansion into newer areas of fee-based business and cost rationalisation will help maintain growth, senior bankers said yesterday. | Indian Banks' Association (IBA) chairman V Leeladhar said that banks have invested substantially in technology which will provide a cutting edge to cut operational costs and maintain profitability. He was unveiling IBA's banking industry Vision 2010 in Mumbai. |
| IBA, under the chairmanship of SC Gupta, CMD, Indian Overseas Bank, has prepared a ten-point action report so as to prepare the banking sector for meeting various challenges. |
| Topping the agenda is the need for the banks to adopt global standards in capital adequacy, income recognition and provisioning norms. |
| While systems in risk management, payment and settlement and regulatory setup need to be strengthened, IBA itself sees a greater role as a facilitator for helping the banking sector during the consolidation phase. |
| Along with Nabard, it aims at helping banks in their effort towards capital structuring through mergers and acquisitions and other measures. |
| It was observed that capitalisation of the banks will primarily be done through raising capital from the market, however, easing of norms on FDI and FII will help capital infusion. |
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