Chillin' out till it needs to be funded
Private Sector banks in India control about $175 billion in assets as of FY 2007. Assuming there was no significant off balance sheet exposure added on since we mostly deal in vanilla securitization and project/retail finance products, there should be a considerably lesser amount of risk for us in private sector banking in india. However, be that as it may, Private sector banks are not really integrated witht he global banking sector ( advantage in the current crisis) but will find it increasingly difficult to face up to such global challenges in the future as processes remain geared to an economy in isolation and as they are yet to fully realize their potential in leveraging their capital for catering to the high growth environment in India and China. Reforms have to go much farther and next time the restrictions in Capital raising are unlikely to be there to save us from the global markets ramifications. Unless my audience takes this negatively, we really need to scale up our products and services to make a material impact on the global financial markets and to that end, I would still recommend a wait and watch approach in investing in the private sector banks. However, they are certainly in a better position today than it was 10 years ago as today they acount for 40% of banking assets in India with public sector / state supported banks still managing assets of $575 billion. The private sector banks need to take over leadership in banking and use these assets to be a lender in the global markets and now that our erstwhile partners are rebuilding themselves (Lehman, Bear and Merrill to name a few) we need to find our own global presence and use the talent in banks and outsourcers to create the new leadership era for Indian Banking.