Modi regime keeps bankers on their toes: Business Standard

Modi regime keeps bankers on their toes: Big reforms like IBC have been initiated. But the jury is out on whether they would help the domestic banking sector become healthy...



Excellent analysis, but negativism dominates!*
“Modi regime keeps bankers on their toes” (Business Standard, May 22), is a timely initiative to open a debate which may help RBI and GOI to consider a mid-term review for corrective measures in financial sector reforms. This is an excellent analysis of the progress in banking reforms by Anup Roy, taking stock of promises fulfilled by Modi government during the first four years and the unfinished agenda.
The flip-side of the analysis is, while all the negatives that can show public sector banks in poor light have been highlighted, the text ignores the rationale behind nationalization of banks in the first place and has not given any credit for the market share of public sector banks in the banking business. The report has ignored the reluctance of private sector banks to rise to the occasion and take over the responsibilities in social banking, penetrating to unbanked/under-banked rural and semi-urban areas and their refusal to increase their share in ‘small’ loans. Improved market capitalization and profit motive continue to guide private sector in India, though their dependence on public resources shows a rising trend.
Analyzing revamp of public sector banks with reference to working results and ‘rise’ in NPAs or poor profitability, when RBI has enforced stringent parameters for NPA-recognition and recovery of bad loans, is like publicizing the pathology reports of celebrities under treatment. It makes good media stuff but goes against public interest.
Such gross negativism promoted by the mainstream media gives credence to some of the allegations made in the public statement submitted to Finance Secretary (GOI) and RBI on April 28, 2018 by the Centre for Financial Accountability (CFA), an independent platform, which has openly accused the government of hatching a well-orchestrated game plan to destroy public sector banks. According to reports, the statement has been signed by 95 eminent individuals belonging to civil society, bank associations and civil rights associations. Much can be said on either side!
M G Warrier, Thiruvananthapuram
*Business Standard has not published my response.
I've covered this also in my article on Public Sector Banks being published in the June 18 issue of The Global ANALYST.

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