Need to maintain regulations in banking: Arundhati Bhattacharya

The SBI chief also said that liquidity risk is the biggest risk which the banking sector is facing today

Underscoring the twin importance of maintaining credibility and attracting foreign capital, SBI Chairman Arundhati Bhattacharya on Wednesday said banks need to meet regulatory norms as India is a capital deficient country.

"Banks in the country are required to maintain things like liquidity coverage ratio (LCR), CRR and SLR and classification of loans also. As India is a capital deficient country there is need to meet these standards and maintain credibility and attract foreign capital," Bhattacharya said at the FICCI Banking Conclave here.

These were the challenges that the Indian banking industry would face in the wake of globalisation which was not there at least ten years ago, she added.

"Now, banks are required to maintain LCR over and above CRR and SLR. Liquidity risk is the biggest risk which the banking sector was facing today," she said adding that it was due to this that the Lehman Brothers of the US collapsed.

Globally restructured assets were classified as stressed assets.

"In India, restructured assets are classified as standard assets. These are challenges we are to live with and grow with," she said.

The SBI chief also said technology was becoming a great enabler in reaching out to the people in the villages.

On this, she said SBI was devising small investment products and flexible deposit schemes for those who were banking through the Business Correspondent (BC) model.

The bank has identified seven lakh Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts for availing of overdraft from the bank. Cyber crime was another issue of concern among the bankers, Bhattacharya noted.