Mumbai : State Bank of India (SBI) today successfully concluded the State Bank ‘Banking & Economics Conclave’ 2014. This Conclave was organized with an intention to stimulate debate and critical thinking on various topic related to banking industry in India. The Conclave was graced by dignitaries from a wide spectrum of business activity like banking, financial institutions, corporate and Government.

 Chairman SBI in her opening speech articulated the emerging environment and the challenges to Banking in India. Chairman also announced the release of SBI Monthly Manufacturing Index which will be a powerful leading indicator in policy formulation. Chairman stressed upon a number of issues which include manufacturing reforms and capital raising among others.

Dr. Raghuram Rajan, Governor, RBI, delivered the Key Note address for the Conclave on sequencing of recommendation by Financial Sector Legislative Reforms Commissions. According to Dr. Rajan, the logic for regulation in FSLRC report is to deal with market failure. Hence, there is a need to strike a correct balance to ensure adequate freedom for bank and financial institutions and avoid regulatory overreach.

There were four panel discussions during the day. The first panel discussed the topic: Should India have an industry driven model like China. According to this panel, India can learn from China but need not copy China in totality. Speed of execution of projects is a key positive from China’s growth story.

The second panel discussion was on role of media in managing sentiments. The panel discussion concluded that media in India is adequately diversified in terms of information dissemination. But there is a need to strengthen regulation of media and allow more participation from civil society to ensure right media behavior. There is also a need to augments skills of young journalist to ensure media retains its credibility in long run.

The third panel discussion was on capital raising for banks and corporates. The panel was of the view that India needs to tap all sources of capital, be it foreign or domestic. However some panelist were of the view that India must also have strong balance of payment position to ensure healthy flow of financial capital. Correcting anomalies in capital market infrastructure and strong bankruptcy laws must be addressed going forward.

he fourth panel of economists discussed the current macroeconomic challenges. What corrective measures should the government take? The members of this panel presented their views on agenda for the new government with special reference to the forthcoming Union Budget.  The members were nearly unanimous on the priorities of the Government in jump starting growth.

Source: Lokesh Shastri