PSBs oppose stake dilution via ETF - The Smart Investor
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Changing with the times
This refers to the report “PSBs oppose stake dilution via ETF” (Business Standard, May 31). Policies and institutions should be subservient to public interest. The recent criticisms by media and analysts directed at government moves to change policy approach or revamp institutional structure in different sectors including regulation and finance give an impression that even those who were pro-reforms, during pre-Modi days, now plead for status quo, whenever changes affect their own comfort zones.
Restricting the discussion to banking sector, while formation of State Bank of India and nationalization of banks were based on sound rationale, primarily the reluctance of the then private sector to think beyond commercial and profit interests. The fast integration of public and private sectors in business mix and exploitation of resources has made it necessary to provide level playing field for institutions in public and private sectors in all respects. As time passes, the differentiation between public sector and private sector banks will, and should, fade away.
As a corollary, GOI, irrespective of their contribution to the share capital of banks, should realize the need to keep away from the In-house affairs of public sector banks beyond the extent permissible as shareholders. Policy interventions, regulation and supervision of all banks should be through the Reserve Bank of India only, for both public and private sector banks.
Recently, a former RBI Deputy Governor (Chakrabarty), according to media reports, observed that “regulations are not rule based”. RBI has never been found guilty of crossing its mandated contours of authority. Uninformed comments coming from former executives cause avoidable embarrassment to institutions like RBI.
M G Warrier