PROBLEMS NOT OF PSBs' CREATION: Economic Times


An edited version of the letter copied below has been published in today's (October 30, 2014)ET:
October 29, 2014

The Editor

Economic Times

 

Chat Room

Right diagnosis

This refers to ET editorial “Fix Systemic Ills in State-Owned Banks” (October 29). In the business of banking, success almost entirely depends on the men who man the key positions in banks and the functional autonomy the banks enjoy within the contours of the law of the land. In this context, the issues relating to structural changes and market-related remuneration to staff including top executives with appropriate safeguards for ensuring performance and responsibility for decisions are much more relevant in public sector banks than when banks were nationalised and enjoyed a monopoly of sorts in their area of business.

Still, one is not able to agree with the view that privatisation is a panacea for all ills or to go by the idea that Axis Bank is a model to be followed. On the limited issue of the criticism of banks in public sector, the question remains what prevents the private sector catering to the needs of the huge clientele now served by public sector banks. The private sector business interests do not allow them to service the millions of accounts maintained by public sector banks, as their primary interest is ‘more profits with less work’ and they look at the creamy layer of the depositors and borrowers. The position will change only when the government at the centre feels the responsibility of viewing nation’s resources(whether in public or private sector or with individuals or other organisations) as belonging to India as a country and guide their exploitation and management in public interest. Let us not throw all the blame on public sector banks.

M G WARRIER

Mumbai

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