Drowned in red

Drowned in red: Banks need to tighten their lending processes to prevent a recurrence of the bad loans problem...

Road to 'recovery'

This refers to your editorial "Drowned in red" (The Hindu Business Line, June 4). The
message sent to banks by Finance Ministry, just before the meeting of PSBs
convened by FM scheduled on Monday, June 6, looks ritualistic. Beyond
admonitions, by publishing scary statistics, it is time all
stakeholders of the Indian Banking System (private sector banks included) sat
together and seriously deliberated about measures needed to restore the health
of the institution of banking which has a major role to play in promoting
economic growth.
Post-independence, India
has been lucky in ensuring sustainability of major pillars of governance
conceived in the Indian Constitution. These are legislatures, judiciary,
executive and the institution of CAG. Among regulators, Reserve Bank of India(RBI)
the financial sector regulator has played a significant role in nurturing the
banking system by effective participation in institution-building and
preventing bank failures. At this stage of development, health of public sector
banks with more than two-thirds share in banking business need to be restored
in national interest. Here, RBI and PSBs need legal and moral support from GOI.
Such support is additional to the role being played by GOI as ‘owner’ and will
Level playing field for PSBs in the matter
of recruitment, training, career progression and remuneration package for staff
as compared to major ‘successful’ private sector banks.
Board being professionalised.
Transparent incentives and disincentives
for executives and middle management professionals. Their survival and career
progression should be dependent on performance (now they are not)
One wishes, this time, FM
and his executives spend more time listening to CEOs of PSBs.
Coincidentally, June 6,
2016 happens to be the 50th anniversary of rupee devaluation. Let
this day of sixes heralds a new era in India’s banking history.

G Warrier
, Mumbai


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