The immediate aim of stepping up the bank privatisation effort is tominimise the likely shortfall in the disinvestment target of Rs 10,000crore, prescribed in the budget for 1999-00. Fair enough. But PSUprivatisation has other fundamental objectives. Freeing the management fromgovernment interference is one. Letting the management exercise commercialjudgment is another. The issue is to let the banks build theircompetitiveness in a milieu in which a number of new private sector banks,both domestic and foreign (let in during the first episode ofliberalisation), are making hay. The finance ministry has said little (thismay not be mere happenstance) on privatisation goals. So, it is difficult tosay if, post-privatisation, banks will become professionally run concerns,answerable to no bureaucrat or minister but only to their shareholders.

The trouble is that even after reducing its equity stake to below 50 percent, the government will remain the single largest shareholder in the`privatised' banks. The chances are that the government will eat the cake(garner revenue from equity disinvestment) and eat it (throw its weightaround) too. Privatisation has been made a predatory instrument. The morethings change, so goes the French saying, the more they remain the same!