Indian Banks in the Era of Global Financial Crisis - Emerging Challenges and Opportunities

Abstract

ABSTRACTFinancial crisis in US gave the birth to the global financial crisis. These crises have created a fipple in the financial markets worldwide. Fortunately, the Indian financial sector has shown remarkable resilience to these developments. However these developments have led to many challenges for the Indian banking industry. This paper briefly touches upon the emerging challenges and possible solutions which are required to be focused upon by Indian banks in the quest for competitiveness. The study analyzes the parameters like priority sector advances of SCBs, globalization of Indian banks, credit-deposit ratio, movements in non performing assets and the IT index. On the basis of these parameters the study finds some emerging challenges, for example, Indian banking is still distant from 100 percent globalization, technology is also isolated in Indian banks, especially  in the public sector, rising priority sector advances have enlarged the NPA's and human resource management is also poor. To face these challenges, this paper suggests some measures like increasing the number of Debt Recovery Tribunals to remove NPAs, products be provided at lower prices to capture market share, banks should adopt the latest technology, and job training should be provided to inefficient bank staff. All the parameters have been analyzed for the periods 2006 and 2007 except the IT index. This is analyzed for the pre-IT and post-IT period. Ratio analysis is used to analyze all the parameters.Keywords- Emerging Challenges, Possible Solutions and Implications