RBI's corrective plan: Moneylife article


Online comments:

Govinda Warrier

This is a welcome initiative from RBI. Gradually, both Government owned and private sector should come under uniform regulatory requirements and have a level playing field for conducting banking business. After all, both raise resources from the same source namely deposits from the public. Post nationalisation, somehow an impression was created that private sector banks are "commercial" banks and only the "nationalised" banks were responsible for ensuring flow of credit for priority sectors and reaching out to rural and semi-urban areas with banking services. Several concessions like depositing shortfall in targeted lending in Rural Infrastructure Development Fund maintained by Nabard strengthened this impression. The differentiation affected public sector banks adversely in all areas including HR management.


Sure. The day the vacancy doesn't require an SC/ST and doesn't require commissions to be sent to political masters and the day this so call CEO has the authority to sack striking employees rather than indulging them, lots of bankers will apply. Why did a young aditya puri apply for a hdfc bank job in 1994 but only a retired banker apply for BOB when the govt invited private sector CEOs for BoB for the first time? Easy to comment here without getting into facts and realities. Fact is that India has the highest NPA in the world - more than double or triple the next highest - despite all the cover up schemes we have to restructure and avoid calling a lot of loans NPAs. The best and only viable solution for NPAs is to not create them. Why is there not a single PSU bank with no NPA problem if we have smart bankers sitting there? Not even 1 smart guy in 27 banks? Why only 2 private banks and 1 foreign bank suffered from this problem when there are so many of them? How does an hdfc or kotak manage to get away completely unaffected by the NPA problem? Hdfc today has a market value more than all 27 PSU banks put together. Can't we see the writing on the wall? We haven't even acknowledged the real issue yet which is corruption and not economic environment or sectoral issues or RBI regulations preventing recoveries. God bless our ignorance and determination to keep running away from reality.

Govinda Warrier in reply to Gupta:

We can go on asking questions. What's that market value of bank, we are discussing? Why private sector banks not improve their market share in banking business to a decent level from the present below thirty percent which is not a pass mark(with moderation)? True, public sector banks are not allowed to recruit professionals from the market, paying market related remunerations.True, the burden of serving semiurban and rural areas which is unremunerative is exclusively given to PSBs. True, Government and politicians treat PSBs as their servants. True, in Government and public sector we don't have a respectable HR policy in place. But can we shift the entire blame for all these to PSBs alone? Till BBB came under Vinod Rai, there was no talk about professionalising bank boards or factorising incentives and disincentives in remuneration of public sector bank employees. Media and analysts have a blow hot blow cold approach while talking about Indian Public Sector which is still the backbone of Economic Growth and Scientific Development in this country.


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