As the Indian banking sector is propelled forward to a higher orbit, the banks would have to strive to remain “relevant” in the changed economic environment by reworking their business strategy, designing products with the customer in mind, focussing on improving the efficiency of their services and having global ambitions. The mantra would be to “Innovate or perish”.
For Japanese banks, the burden of disposing of domestic non-performing loans that had mounted up after the bursting of the asset bubbles resulted in erosion of their equity capital. The Japanese financial crisis in the late 1990s led to a decline in their creditworthiness and hence the loss of their funding capacity in foreign currencies.