This refers to Janmejaya Sinha's article "What about near national treatment for state banks?" (December 11). It is necessary to have a level playing field for all banks in India. Public sector banks (PSBs) are commercial entities with a social heart and, therefore, have a greater responsibility towards socio-economic development. Private banks, in contrast, enjoy a greater degree of functional autonomy and are obviously able to deliver a higher degree of operational efficiency. It is right that the two key challenges confronted by the PSBs are "manpower" and "capital". While a few of them have already exhausted the threshold limit of 51 per cent of government holdings, others are either in the process or about to exhaust the limit. This makes it difficult for them to build the capital base further. Raising capital, therefore, is going to be a critical issue in terms of their future business expansions since over 70 per cent of assets in the banking system are still controlled by PSBs, which will definitely have a bearing on India's growth rate. Also, the requirement of additional quality manpower needs to be sorted out in a meaningful way with improved pay packages, else they will face extremely tough times ahead.
Srinivasan Umashankar Nagpur
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Srinivasan Umashankar Nagpur
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number