Are Indian banks ‘financially robust'?

Yes, Indian banks are financially sound unlike their counterparts across the globe.

Banks must satisfy regulatory capital requirements that are intended to ensure they can sustain reasonable losses. Large banks should face higher capital requirements than small banks.The failure of a large national bank, is almost certain to have a bigger impact on the banking system and the wider economy. Capital requirements for a bank should increase with the proportions of its debt that is short term. Capital requirements also depends on the liquidity of the assets held by a bank.

Yes.  We have a very stringent system for provisioning.  This will not allow the Banks to make their bottom line rosy.

CFSA assessment confirms that Indian Banks are Financially Robust. and their reasoning . As of March, 2009, the capital adequacy ratio of Indian banks stood at 13.98 per cent, thanks to the high capital adequacy ratio maintained by private and foreign banks. Although government-owned banks have relatively lower ratios, they are still quite comfortable.

Yes, i very much feel our Banking sector is financial robust and quite healthy in the current scenario. Thanks to the stringent terms and conditions (policies) set across to the Indian banks by the RBI. And i dont have to explain much about this, the fantastic example is the incident happened world wide the last year and the RBI policies acted as a high protective shield against all such incidents. Appreciate the way RBI is with our banking sector. ....Thank you, Manish N

Cheers!! 

Indian banks are financially robust becoz as we've seen in last two decades, banking sectors perform well, despite some political & fund-credit crisis statement which are low as when, govt policy towards repo & slr rate have been changed. not more ideas to debate on any points......

Though i dont call Indian Banks as Robust yet, they are certainly very strong. We are all aware what happened to some of the Big Financial Instutions of the so called Developed Countries & such big fall could not have any negative effect on our banking system.  Did anybody predict the fall of Lehmann & his many brothers & Sisters...! Our Banks are built on a strong fundamentals,basics. Every bank has strong lending principles & most banks have their NPAs under control.  Probably some cosolidation will make our Banks Robust.

The Risk Capacity of bank is also needed to be considered while releasing liquidity. In fact it is the base for calculating risk appetite.

Banking sector employees also have marketing & sales teams and are given targets on yearly basis. The employee has to work within the stipulated guidelines set for releasing loan. But again to achieve sales targets, the marketing team
goes back to the management asking for exemption in order to achieve targets set. The senior managers of marketing team try to convince management to release loans to important customer accounts on case to case basis and it becomes benchmark for the next proposal also, which is not healthy for every case and may lead to default.

Though market conditions and estimates may be quantifiable but they cant be banked upon totally, hence though the sales team may have put necessary checks to assess repayment capacity of the customer, the return from retail/corporate account largely depends on success of their ultimate business.

Luckily indian PSU banks dont totally rely on estimates but are conventional in their methodology to assess creditworthyness of a firm, which has kept them robust amidst economic crisis world over.