With reference to the report, "Government unhappy with public sector banks' recovery record" (June 4), the message sent to the banks just before the meeting of PSBs called by Finance Minister Arun Jaitley on June 6 looks ritualistic. Beyond admonitions such as publishing scary statistics it is time all stakeholders of the Indian banking system, including private sector banks, jointly deliberated measures needed to restore the health of banking.
After Independence India has been lucky to ensure sustainability of the major pillars of governance conceived in the Constitution. These are legislature, judiciary, executive and the institution of the Comptroller and Auditor General of India. Among regulators, the Reserve Bank of India (RBI) has played a significant role in nurturing the banking system through effective participation in institution-building and prevention of bank failures. At this stage of development, the health of public sector banks (PSB) with more than two-thirds share in the banking business needs to be restored. Here, the RBI and PSBs need legal and moral support from the government. This is in addition to the role being played by the government as "owner", which includes:
i) A level playing field for PSBs with major private sector banks in the areas of recruitment, training, career progression and remuneration package for staff.
ii) Making boards professional.
iii) Transparent incentives and disincentives for executives and middle management professionals. Their survival and career progression should depend on performance.
This time the finance minister and his team should spend more time listening to chief executives of PSBs. June 6, 2016, is the 50th anniversary of rupee devaluation. Let this day of sixes herald another era in India's banking industry.
M G Warrier, Mumbai
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