have effectively overcome the national borders in the financial services business. widespread use of internet banking has widened frontiers of global banking, and it is now possible to market financial products and services on a global basis. in the coming years globalization would spread further on account of the likely opening up of financial services under wto. india, as you know, is one of the 104 signatories of financial services agreement ( fsa ) of 1997. this gives india ’ s financial sector including banks an opportunity to expand their business on a quid pro quo basis. indian banks at the global stage : a reality check as per indian banks'association report ‘ banking industry vision 2010 ’, there would be greater presence of international players in indian financial system and some of the indian banks would become global players in the coming years. so, the new mantra for indian banks is to go global in search of new markets, customers and profits. let us not forget that the competition is not only on foreign turf but also in the domestic field as well from foreign banks operating in india. now against these lofty objectives of indian banks going global, let us see where we stand. although, indian banks have also made their presence overseas, yet it is limited. only twenty indian banks including private sector banks appear in the list of “ top 1000 world banks ” as listed by the london based magazine “ the banker ”. what is even more revealing is that state bank of india, india ’ s largest bank, ranks 82nd amongst the top global banks. size is increasingly becoming important for the global banks as it is crucial to improved efficiency. however, india ’ s largest bank, sbi is not even a 10th in size of the 9th largest bank, sumitomo mitsui, which has assets of $ 950 billion as against sbi ’ s assets of $ 91 billion. therefore, the notion that sbi or icici bank can compete in the international arena seems far fetched at the moment. is size the only constraint for indian banks? the problem is not just one of lacking the necessary size ; few indian banks have the necessary products or human resource capabilities. if anything, the implementation of basel ii norms has raised the bar for indian banks seeking an international presence. the top international banks can lower their capital requirements through the use of sophisticated risk management techniques and thus compete more aggressively than before. what is being done to prepare indian banks to meet global challenge? indian banking sector has already implemented internationally followed prudential accounting norms

- a - vis us dollar has been attracting large foreign institutional inflows during the last two years. while we have an all time high foreign exchange reserves of more than $ 130 billion, high capital inflows pose a big challenge to monetary and exchange rate management. in this context, operationalisation of market stabilisation scheme ( mss ) has given an additional instrument for liquidity and monetary management. to sum up the challenge, i would like to quote a statement of dr. y. v. reddy, governor, reserve bank of india, which he made at the annual meeting of bank for international settlement ( bis ) on june 28, 2004. and i quote, “ ….. special defences need to be put in place for ensuring financial stability in the case of countries like india that are faced with the prospect of volatile capital flows. the issues relating to cross - border supervision of financial intermediaries in the context of greater capital flows are just emerging and need to be addressed. ” technology is the key as i mentioned in the beginning of my speech, technology has thrown new challenges in the banking sector and new issues have started cropping up which is going to pose certain problems in the near future. the new entrants in the banking are with computer background. however, over a period of time they would acquire banking experience. whereas the middle and senior level people have rich banking experience but their computer literacy is at a low level. therefore, they feel the handicap in this regard since technology has become an indispensable tool in banking. foreign banks and the new private sector banks have embraced technology right from the inception of their operations and therefore, they have adapted themselves to the changes in the technology easily. whereas the public sector banks ( psbs ) and the old private sector banks ( barring a very few of them ) have not been able to keep pace with these developments. in this regard, one can cite historical, political and other factors like work culture and working relations ( which are mainly governed by bipartite settlements between the managements and the staff members ) as the main constraints. added to these woes, the psbs were also saddled with some non - viable and loss making branches, thanks to the social banking concept thrust upon them by the regulatory authorities in 1960s. globalisation of financial services growing integration of economies and the markets around the world is making global banking a reality. the surge in globalization of finance has also gained momentum with the technological advancements which