Mrs. Padmalatha Suresh and Dr Justin Paul have written an extremely useful book on banking. Banking industry has undergone far-reaching changes in the recent period as a result of the banking reforms initiated in 1991–92. Among other things, banking reforms focused on the deregulation of the interest rate structure, introduction of prudential norms and imparting greater competition by allowing new banks and by permitting private participation up to a limit in public sector banks. Even as banks are required to fulfill certain socio-economic goals, they have to remain viable and efficient.
The introduction of the various measures which formed part of the banking sector reforms has had an impact on the way banks perform their functions. Conformity to the new prudential norms requires that banks manage their liabilities and assets in ways different from those practiced earlier. With the deregulation of the interest rate structure, banks have to pay attention to the interest rate risk besides the usual credit risk. The change in the exchange rate regime calls for banks to pay attention to exchange rate risk. These and many other problems have been dealt with lucidly by the authors in this book. The authors are eminently suited to write a book of this type. They have an excellent academic background. They also have the practical experience of dealing with banking issues at various levels. The book fulfills a need and I am sure it will be welcomed by students of banking as well as executives in the banking industry.
Economic Advisory Council to the
Reserve Bank of India