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FM asks banks to be ready for liberalisation

Asking banks not to shy away from competition, Chidambaram said they should not be afraid of enemies.

india Updated: Mar 24, 2006 18:08 IST

Finance Minister P Chidambaram has said that the Government is at a "striking distance" of implementing the Tarapore Committee report on full capital account convertibility.

He also asked banks to get ready for liberalisation, saying it will benefit them in the coming years.

Prime Minister Manmohan Singh had earlier asked the Finance Minister and the RBI to prepare a roadmap on the full float of the Rupee.

Singh had told the Central Bank in Mumbai last week that things had changed since the issue was examined by the Tarapore Committee a decade ago, and that there was merit in moving towards fuller capital account convertibility.

Chidambaram was speaking after launching SyndBank Services Limited, a wholly-owned BPO subsidiary of the Syndicate Bank and its 525th centralised banking solution branch.

"Why should some employees of the RBI question the wisdom of this idea," he asked, criticising some employees who had taken a stand against the proposal.

"They should examine the idea and contribute to the debate if they so wish. But an idea should not be opposed merely because one is not familiar with that idea".

The FM said liberalisation would help banks progress in the next 10-15 years, much like nationalisation enabled banks to advance in the 1970 and 1980s.

Asking banks not to shy away from competition, Chidambaram said, "You banks should not be afraid of enemies. It's your foes, enemies and opponents who put steel in you to go forward."

He also urged the banks not to be afraid of technology. "Please accept technology," he said.

He added that money remitted by overseas Indians to their home country was about $30 billion US dollars per annum, and that this figure would go further up with the increase in the number of Indians working abroad.

First Published: Mar 24, 2006 18:08 IST