RBI norms save banks from financial trouble

Indian banks had good risk-management skills under prudent regulations of the Reserve Bank of India (RBI), felt Steve Lindo, executive director, The Professional Risk Managers' Insternational Association (PRMIA).

At an interactive session at the Bengal National Chamber of Commerce and Industry (BNCCI), Lindo said, "Under RBI's regulation, Indian banks avoided some of the harmful practices by the western banks."

On being asked if public sector banks in India should shed government equity, Lindo said, "The transfer of ownership seems to be a positive step. It will lead to better efficiency, more customer orientation and modernisation of the system."

The ability of the central banks worldwide to exert pressure on private banks would ensure that banks do not charge higher rate of interests if the cost of funds were low, he added.

"In the long term the law of demand and supply should determine the lending rates," said Lindo.

PRMIA, along with some universities across the world offer courses on risk management.

In India. It has outfits in Kolkata, Hyderabad, Mumbai, Delhi and Bangalore.