Indian banks have identified international banking as a key opportunity to expand their geographical reach and to cater to the cross-border needs of the clients through leveraging their domestic banking strengths to offer products internationally.

The world, over the last few decades, has become a single `global village' with technology shrinking the physical barriers across the globe. Not surprisingly, integrated global banking has become the order of the day and not merely the buzzword. Regionalism is an anachronism today. Recognizing this expected scenario, Indian regulators had initiated financial sector reforms (as part of the economic reforms launched in the country since 1991-92) to strengthen the banking system in an increasingly competitive environment and guard against financial fragility.

Over the years, Indian policy framers have resorted to stricter norms in the areas of provisioning requirement, recognition and classification of NPAs (Non-Performing Assets), recognition of income, etc. Banking system has also witnessed the introduction of globally accepted measures to evaluate their exposure to various financial markets. For example, for the valuation of government securities the mark-to-market practice has been introduced. Also more recently, concepts like `Know Your Customers' have been introduced to make the banking system more efficient. At the same time, in the recent years more autonomy is given to the Indian banks through liberalizing the norms for Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), and simplifying the norms for raising and investing the funds, though within the prescribed guidelines.

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