Mega Bank Mergers: Handle with care
M G Warrier
Letters
September
9, 2019
Handle
with care
Tamal Bandyopadyay’s
insightful article “Bravo FM, but it’s only half the job done” (Business Standard, Banker’s Trust,
September 9) gives a realistic recap of the progress of banking sector in India
post-nationalization and gives practical suggestions for making the current
phase of banking consolidation purposeful.
Perhaps,
India may be the only country which has deployed the resources and outreach of
banks as an effective tool in the nation’s economic development with focus on
financial inclusion with insight and foresight continuously for half a century.
It goes to the credit of GOI as owner of public sector banks and RBI as the
regulator and supervisor of the banking system that whatever has been achieved
by financial intermediation across the sectors was without much damage to the
institutional system. This was made possible by timely intervention to
restructure and reorganize the banking infrastructure, by reorganization of
existing institutions and introducing new players where necessary. Viewed in
this perspective, the present merger of 10 PSBs to form 4 is a continuation of
such efforts.
So long as
banks continue to mobilize resources using the public deposit route, they will
not be able to get away from the responsibility to provide need-based banking
services including lending to priority sectors. GOI and RBI will have to ensure
that all banks get a level playing field to manage their business
professionally. From this angle, not only banks, but all statutory bodies and
PSUs need a free hand, subject only to transparent regulatory mandates, to manage
their resources, personnel and day-to-day administration.
M G Warrier, Mumbai
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