Indian banking needs strategic and conceptual changes due to radical changes happening in the world like revolution in information technology, steady growth in expertise, gradual open and transparent policy adopted by regulators of monetary market and globalization and consequent competition.
It is true that slowly but not steadily the banking industry in India is undergoing some change both in strategy and behavior. The change is not yet perceptible and has not been conceived and put into practice after thorough research and study. The change that is emerging in the scene is more an outcome of the ideas of some vibrant and visionary leaders who are keen to experiment and do something different than others. Such experimentation is surely welcome but the need of the hour is to bring about a coherent policy and chart out a plan for bringing about a radical change in the attitude and strategy of Indian banking. Such a change has become necessary as the banking industry in India is undergoing a total transformation due to liberalization and opening of capital and money market worldwide. Today, there are many instruments available to source and invest funds globally.
Reliance's visionary management inspired others to think about and adopt policies, much different from the conventional methods, to mobilize large funds at low costs. Between 1977, when Reliance made the public offer for the first time and 1993, when the winds of liberalization had not begun to change the highly regulated and mostly public sector banks and financial institutions in India, the asset base of the company increased from Rs. 31 cr to Rs. 4,640 cr. Obviously, the company had to mobilize a large part of this fund (Rs. 3,000 cr) from the market. This growth could be possible only because of innovative management of financial instruments, particularly the introduction of convertible debentures in the Indian capital market. |
