July 10:Asserting that economy would bounce back, Finance Minister P Chidambaram said on Wednesday that "right attitude and patience" could help the country face the problems like soaring inflation.
"Fast growing economies (like India) will face such problems. But the right attitude, patience and grit can help us not only face the problem but also tackle it," he said after laying foundation stone for Indian Bank’s new head office in Chennai.
"We came out of crises like the 1997-98 Asian financial crisis and the 1989-90 foreign exchange reserve crisis. Can’t we come out of the present situation?" he said.
India had bailed itself out of other crises like the "first oil shock in 1973" and the 24 per cent inflation rate in 1979-80, he said.
"Despite the growing inflation (at 11.63 per cent for the week ended June 14), banks are still issuing loans and education loans alone to the tune of Rs 20,000 crore has been disbursed to 12 lakh students in the country," he said.
He reiterated that the growing rates of crude oil had influenced prices commodities and metals, leading to overall rise and inflation.
"But we can patiently handle the situation using globally accepted economic formulae," Chidambaram said.
Since India was a growing economy, it was a "different ball game" to finance a growth rate of nine per cent against the five per cent a few years back.
"Credit flow and money flow has expanded, as is the case with capital flow from abroad. Sometimes it leads to embarrassments like inflation, but we have to tackle it," the minister said.
Lauding the banks for coming out with a "comprehensive list" of beneficiaries for the farm loan waiver scheme, Chidambaram said there was no grievance among beneficiaries.
"As many as 70,000 bank branches had finished updating the list by June 30 and the details have been displayed in front of all banks," he said.
He also recalled his promise to the banks of compensating them in the wake of the loan waiver, announced in the Budget.
Speaking about the function of nationalised banks, Chidambaram said they must function like commercial organisations as "they are not charitable trusts".
"People believe in banks and therefore deposit their money. And this money is disbursed to beneficiaries as loans and banks should be clear in handling the two as business," he said.
On the changing profile of Indian Bank, Chidambaram said deposits in the bank have grown four-fold in the past decade, growing from Rs 15,000 crore to Rs 61,000 crore at present and it was performing well on other areas also.
He also termed as "heartbeat" the role of banks in proper functioning of the "heart" called the Finance Department.
M S Sunderarajan, Chairman and Managing Director, Indian Bank, said that the Board of Governors of the bank had approved a 40 percent dividend for its customers.