Public money 100% safe in state-run banks: Goyal
Public money 100% safe in state-run banks: Goyal: Public money is 'hundred percent safe' in state-run banks, Interim Finance Minister Piyush Goyal said on Tuesday, allaying apprehensions in the wake of recent major scams unearthed in public sector banks (PSBs)...
June 20, 2018
This refers to the letter captioned “Morale booster” from V Jayaraman, Chennai (Business Standard, June 20) which inter alia seeks a reassurance from RBI that bank deposits are safe. There is no denying that Indian Financial Sector is going through a rejuvenation process which has brought to surface several weaknesses that existed for long, but did not attract public attention. The plea for a reassurance from RBI about the safety of moneys with the banking system shows that public still trusts the banking regulator.
Three reports in today’s newspapers, while giving some relief to the bank depositors, seek speedier and coordinated action from law makers and regulators including RBI and SEBI.
One, Finance Minister Piyush Goyal’s assertion that “the Government stands behind public sector banks and public money (deposits) is extremely safe in PSBs”. He also indicated that GOI and RBI will be in conversation about any more powers needed by RBI to regulate/supervise PSBs.
Two, in an interview given to The Hindu ( June 20), the vice-chairman of NITI Aayog Rajiv Kumar recognized the need for an in-depth diagnosis and careful and sustained handling of the problems of PSBs which has shown up as rising NPAs in recent times. He is of the view that further diagnosis can be done keeping in view the P J Nayak Committee findings.
Three, the root cause of NPAs being the unhealthy fund management by corporates, there is urgent need to discipline bank borrowers. The casual observation by the finance minister that while he was ‘sure about the safety of bank deposits he didn’t know how safe it (deposits) in certain private companies that have huge tax dues’ and the Business Standard report “Probe into 80,000 shell firms runs into PAN hurdle” filed by Veena Mani (June 20) need to be read together as both hint at the uncomfortable state of affairs in the private sector.
M G Warrier, Thiruvananthapuram