Letter to BS: IMF warns India over PSBs, advocates privatisation

In the last few years, very little has been done to improve governance, whether at the board level or top management

Apropos “Sovereign-banks nexus a worry: IMF”(August 9), the International Monetary Fund (IMF) has in its Country Report on India under Article IV, cautioned India against the macro-financial risks that have emerged from the government ownership of public sector banks (PSBs). The IMF had underscored the vulnerabilities emanating from this nexus and stressed the importance of a comprehensive plan to improve governance, internal control and operations of PSBs. Earlier, the Financial Sector Assessment Programme (FSAP) in its financial stability part on risk assessment had emphasised the need for recapitalisation of PSBs along with their restructuring. It also spoke about the need