India not in favour of corpus for future bank bailouts

India yesterday said it did not see any need for taxing banks to create a corpus for future bailouts stressing that problems of deviation in the function of financial institutions could be addressed through well-placed regulations.

This was stated by finance minister Pranab Mukherjee in his talks with Sakong Il, chairman of the presidential committee for G-20 finance ministers meeting, in Busan, South Korea.

The levy idea is backed by the US and Europe but is being opposed by developing nations. Australia and Canada are also opposed to it on the grounds that their banks did not trigger the 2008-9 financial crisis and were therefore not liable for cleaning up the mess.

Mukherjee said India's banking system could withstand the trouble, thanks to well-placed regulations.

The Indian banking system had largely remained unscathed during the global financial crisis, which brought down many banks based in the US and Europe with some seeking state help to stay afloat.

Both Mukherjee and Sakong, a former finance minister of South Korea, concurred on the major contribution of G-20 in the global economic recovery, which reflected the change in the balance of power in the world.