Subir Roy’s column, “Why merge public sector banks?” (October 19), says the Banks Board Bureau (BBB) has got an expanded mandate. Its new job is to advise the government in extension, termination and design of the structure at board and senior management level of public sector banks (PSB).
The BBB’s present mandate includes assisting in business strategies and capital-raising plans. Everything put together, the BBB will be able to keep a grip on whatever a bank chairman and the board want to do.
Earlier, PSBs had two bosses — the Reserve Bank of India (RBI) and the Department of Banking in the Ministry of Finance. Now the number is three. Whom will they listen to?
If the BBB says two banks should merge, say, Bank of Baroda and Indian Bank, then where do those banks represent their case? The RBI may think differently about the merger.
A merger does not make any sense. There is no reason why a bigger bank will do better than two, existing smaller banks. The suggestion is amateurish. The BBB will be another parking place for favourite retired officers, who simply go on recommending odd things.
By abolishing the Planning Commission, the Narendra Modi government had shown some foresight. Now, creating and expanding the BBB is tantamount to, “two steps forward, one step back”. All that needs to be done about BBB is to abolish it.
Sukumar Mukhopadhyay, New Delhi
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Sukumar Mukhopadhyay, New Delhi
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
