IIPM PUBLICATION
Even according to the RBI data (‘Banking System in Emerging Economies: How Much Progress Has Been Made’, Vittaldas Leeladhar, Dy. Governor, RBI), compiled on 14 emerging economies over the past 10 years, it is quite clear that private domestic banks have participated in total credit expansion to a considerably greater extent than either foreign or state-owned banks – for every 10 percentage points increase in the credit to GDP ratio, credit extended by private domestic banks has expanded on an average by 8% of GDP, while the share of foreign-owned banks has increased by about 1½% of GDP, and that of state-owned banks by less than 0.5% of GDP. So aren’t the government and RBI learning now? Under great media hype, hasn’t it been decided by RBI to sell its stake in State Bank of India by June 2007? Isn’t that a most encouraging sign? Well, for the want of a better term, I should mention that this is the biggest joke in the banking circles currently. And why? Guess who’s buying RBI’s stake . . . The government!
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Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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