KEEP STRONG VIGIL ON ASSET QUALITY, PRANAB TELLS BANKS

The Finance Minister, Mr Pranab Mukherjee, has advised public sector banks (PSBs) to be vigilant on their “asset quality” while not being risk averse in taking bold and innovative lending decisions.

Asset quality of PSBs had seen some deterioration in the recent months, partly on account of the tightening of interest rates in the economy. Interest rates have gone up on account of the policymakers' resolve to moderate the levels of inflation, Mr Mukherjee said at the 106^th Foundation Day celebrations of the Bank of India (BOI) here.

He highlighted that the inflation challenge faced by India was partly an offshoot of the policy response in developed countries to the global financial crisis. The developed world had, post the financial crisis, adopted an easy money policy to counter their economic woes.

‘TURBULENT TIMES'

“These are turbulent times and we should watch every step that we take. But this should not prevent us from taking bold and innovative steps,” Mr Mukherjee said.

To tame inflation that is running close to double digits, the Reserve Bank of India has raised interest rates 11 times in the last 18 months. A loose monetary policy adopted by the developed world has led to gush of capital flows into emerging economies such as India, fuelling inflation here.

Mr Mukherjee inaugurated 106 branches of the bank across India. He also launched 10 financial literacy and credit counselling centres, a senior citizen pension card, a platinum savings deposit scheme and international travel card.

“With today's inauguration of new branches, Bank of India is represented in all States of the country, and is committed to grow and develop the economy of these States,” Mr Alok K. Misra, Chairman and Managing Director, BOI, said.

Bank of India also intends to expand its overseas presence by entering four new territories at New Zealand, Uganda, Botswana and Canada in the next one year, Mr Misra said. Currently, about 20 per cent of the bank's business and operating profits are derived from overseas operations.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2433019.ece