And the best banks in India are…

FM could not have picked a better platform to highlight the need to take banking facilities to Indias unbanked population.

Finance minister Pranab Mukherjee described the FE Best Banks Awards function held on Tuesday as having evolved into a popular event for India Inc to highlight the importance of bringing banking to those who need the very basic financial services.

I am very happy to see that this event,organised for the last 13 years,is gradually evolving into a popular event that could significantly contribute towards highlighting the importance of expansion of banking activities for economic development, noted the minister.

Addressing leaders of India’s financial and corporate sectors,including FE Lifetime Achievement Award winner C Rangarajan,chairman of Prime Ministers Economic Advisory Council,FE Best Banker of the Year Chanda Kochhar,MD & CEO,ICICI Bank,and Best Innovator of the Year Shikha Sharma,MD & CEO,Axis Bank,Mukherjee was confident opening avenues for banking facilities to larger sections of society will make growth faster. For the current fiscal,he projected a robust 8.5% growth rate of GDP with the blessing of good monsoon. Though IMF has predicted higher growth,I would like to be conservative, he said.

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The FM used the platform to explain why banking for the other half also the theme for a sparkling panel discussion later in the evening was so close to his heart. The topic is important for all of us and especially to me in view of the impact it can make in furthering the growth process by opening avenues for banking facilities to larger sections of the society.

This is in the context of the growing need to cater to the bottom of the pyramid citizens and therefore,it is necessary to use all our resources and policy options more effectively and in an equitable manner.

A robust banking sector working under an efficient regulatory framework can become a boon to a large section of smaller but important customers that have a direct bearing on the economic environment by their participation in economic activities,he said. Clearly,these developments highlight,more than ever before,the importance and relevance of banking for the uncovered population. However,in order to achieve this objective,there are numerous challenges especially relating to an integrated and a coherent policy approach.

Turning to the global backdrop of the event,now in its thirteenth year,he said: The global financial meltdown has also changed the landscape of global banking. The financial structures,which were once considered strong and healthy,revealed its true picture in the wake of the sub-prime crisis and consequent adverse developments. While he said the Indian banking sector was ‘lucky’ to not get significantly affected,he said it wasn’t totally immune. We have had some indirect effect on our financial system,but were effectively treated with timely and appropriate steps from the government and the Reserve Bank of India, he said.

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His advice to Indian banks was to adopt best risk management practices to stay attuned to the global developments. At the same time,consolidation and meeting capital requirements will be key thrust areas for Indian banks now,along with leveraging advanced technology and managing human resources effectively. Ahead of the upcoming results season,Mukherjee said the 13 winning banks have done well despite last year’s tough times.Most of the banks have recorded higher net profit of 15-20%,which is good considering the economic situation we had gone through during 2009-10, he said.

Speaking about the macro-trends for the economy,the minister felt the numbers from industry,exports and the core sector were encouraging and thanks to stimulus packages of the government and RBI’s monetary measures,stability has been maintained in the system.

His parting words to bankers were reaching the top is one achievement and sustaining the top position is another ball game altogether. He advised conceptualisation,planning and meticulous implementation as essentials for staying on top. I feel (the) award function is an occasion for introspection and benchmark the award winners with oneself,he concluded

WINNERS LIST – 2010

Top banks in the following categories:

NATIONALISED BANK

Rank I: Punjab National Bank

Rank II: Bank Of Baroda

NEW PRIVATE SECTOR BANK

Rank I: HDFC Bank

Rank II: Axis Bank

OLD PRIVATE SECTOR BANK

Rank I: Federal Bank

Rank II: Tamilnad Mercantile Bank

FOREIGN BANK