JOIN USCentre to bring in more banking reforms soon
Public sector banks may be bleeding due to rising non-performing assets, but the government has no plans to sell them off, according to Finance Minister Arun Jaitley. In fact, the government is looking at announcing more reforms in the sector.
Jaitley on Sunday said the country is not at a stage where the government can completely exit its holding in the 27 public sector banks. “I don’t think India has reached a stage where the state can pull out of banking altogether. State sector banks have performed an important role as far as geographical reach is concerned, and they have an important role to play going forward as well,” Jaitley said, while speaking at the CNN Asia Business Forum 2016 at the ongoing Make In India Week in Mumbai.
“We will be announcing a series of banking reforms in the days to come,” Jaitley added.
Minimal interference According to Jaitley, government interference in running PSU banks should be minimal and their boards have to be professionalised. “ The government does have to play at an arm’s length distance from the functioning of banks. Bank boards have to be professionalised,” Jaitley said.
In order to professionalise the operations of these state-run banks — which control over 70 per cent of the industry — the government has already committed to bring down its holding to up to 51 per cent.
The government had last year announced the ‘Indradhanush’ programme to revamp state-run banks. It has already put in place steps to professionalise their management.
As far as stake sale in some of the PSU companies are concerned, Jaitley said that they have been delayed due to the market conditions. “Strategic sales are part of the government agenda, but we cannot do stake sales when the market is in turmoil. Some of them are part of the government agenda going forward,” Jaitley said.