The banking industry in the country needs to have both regulatory permission and administrative strength to involve themselves in overseas mature financial markets.

The banking industry in India is already global in many ways. Most banks have international offices and branches, and almost all the banks have excellent correspondent arrangements with leading banks abroad. With the opening up of the Indian economy in 1991, these have become a necessary part of bank expansion, going towards meeting the expectations of the corporate clientele.

The word `globalization' can be used in many contexts. It can include the function of being an international banking conglomerate having the wherewithal to put through complex deals like swaps and syndication through a variety of instruments. These entail membership and expertise in various organizations dealing in these securities. Mostly, however, these instruments are the result of `across-the- counter' deals, where default risk and operational risk need to be looked into. Another area where a bank is truly global is in its ability to have ready access to the euro markets and loan/deposit transactions in currencies not its own.

Subject to regulatory constraints, one yardstick of globalization is the number of new products and services that we are able to offer. Basically, the idea is to give the customer an opportunity to be able to participate in the market abroad, without directly doing so. This entails having a strong intermediary and this is where the bank comes in. This includes setting up new portfolios based on stocks abroad, derivatives transactions, and participating in the euro market.

Analyst Magazine, Indian Banking, Globalization, Derivatives Transactions, Capital Assets Pricing Model, Banking Industry, International Banking, Operational Risk, Infrastructure Sector, Multinational Funds, Euro Markets, Asset-Backed Securities, Global Banking.