Letters to the editor
Free PSBs of govt yoke
Apropos of the editorial ‘Waiting is not going to help’(April 8), I agree with SBI Chairman Arundhati Bhattacharya when she says that Indian banks operate in a very different scenario compared to their international counterparts. The root of the problem is the government’s interference in the activities of the public sector banks (PSBs), which also must function as commercial banks booking their own profits and losses. The sky-rocketing NPAs of the PSBs can be attributed to the pressures that the government has put on them, viz. the UPA government allowing loan waivers to the farmers to the tune of R80,000 in the recent past, though many of them were affluent. Infrastructure projects that the banks lent to have also been held up for environmental and other clearances not being granted for years together; banks had been forced to become mute spectators as their monies lay idle. Of late, RBI has set guidelines and advised them to be more careful before extending such loans! So, prime minister Narendra Modi’s public posturing about non-interference in PSBs activities has to be translated into practice as the inherent conflict between government and RBI continues unabated. While RBI has to visualise the impacts of food price inflation in case of drought, fall in exports, rise in crude prices, etc, before going for rate cuts amidst pressure from industry, PSBs are made the easy scapegoats by the government looking for growth numbers to cite to the public.
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