UTI chief wants a 'super regulator' for financial sector

NEW DELHI, NOV. 27. The Unit Trust of India (UTI) Chairman, Mr. P. S. Subramanyam, today proposed a "super regulator" for the country's financial sector in line with the Financial Services Authorities (FSA) of the U.K.

Speaking at the World Economic Forum, he said the recent developments in the Indian financial sector called for a super regulator instead of having separate regulators for banks and capital markets.

The super regulator would ensure that the banks were moving in the right direction, he said pointing to the problems faced by listed banks, now under three regulators - the banking department under the Union Ministry of Finance, the Reserve Bank of India and the Securities and Exchange Board of India.

The ICICI Managing Director, Mr. K. V. Kamath, said banks were now required to maintain at least 10 retail products under their portfolio including insurance products in order to stay competitive.

Critical of the proposed dilution of Government stake in public sector banks to 33 per cent and yet retain the PSE status, he said investors would be looking at the corporatisation of banks and not the shareholding pattern.

The Deutsche Bank India country head, Mr. Javed Shirazi, said there had been progress in the banking sector in one way by allowing public sector banks to tap the market but change of governance had not happened.

Referring to the loss-ridden weak banks, the UTI chief said the banks should be allowed to sell some of their branches to generate more cash. He said foreign banks should be allowed to take stake in public sector banks, which was not permitted under the current banking norms.

Asking Indian banks to come out of their "inward" looking outlook and go global, Mr. Subramanyam said this would require relaxation in the policy framework.

As an alternate means of raising funds, the UTI Chairman suggested that banks should be allowed to unbundle their assets, securitise and rate it by rating agencies and use it to raise funds from the market.

- PTI

Send this article to Friends by E-Mail

Section  : Business
Previous : SEBI simplifies procedures for FIIs
Next     : HM plans more Lancer variants