Twenty years ago in India, customers used to wait for three or four years to get delivery of an Ambassador or a Premier Padmini car — that too after paying 40 per cent of the cost of the vehicle as booking advance. Come 2007, the situation has changed as latest generation vehicles made by global giants are available for immediate delivery.

“Indian financial sector is now in that age of Ambassadors and Premier Padminis. Public sector banks here are at least 25 years behind global standards. As a result, Indian banks are losing out business to global banking giants,” said Percy Mistry, former chairman of the Committee on Making Mumbai an International Financial Centre (IFC). “Indian banks have no experience in handling global financial products and services,” he said.

“They can become globally competitive, but the government should completely get out of banks, insurance companies and mutual funds... Why should the government hold stakes in these institutions? Leave it to the private sector. Without reforming the financial sector, you can’t make Mumbai an IFC,” Mistry, who worked in the World Bank and investment banks across the world, told The Indian Express in an interview.

Mistry, who runs Oxford International Group, an investment advisory firm, said Indian banks would miss a great opportunity if the financial system is not reformed and the government stake is not reduced. “India stands to lose up to $70 billion in the next 12-15 years in terms of fees and other contracts if the financial sector is not opened to competition. Each year’s delay will cost us dearly,” he said.

... contd.