Letter to BS: Infrastructure financing is not the core competence of PSBs

If the level of NPAs is at an alarmingly high level, the confidence in PSBs is also at a historically low level

It needs to be understood that infrastructure financing is not the core competence of the public sector banks (PSB). Unlike in the earlier days when there were institutional giants such as the IDBI and ICICI that were primarily set up to fund infrastructure, there are no such institutions in existence today. They have now been converted into commercial banks to gain access to low-cost deposits. Practically, the role of development finance institution is rendered outdated on account of the long gestation period and the high cost of deposits.

The issue is also about corporate funding as big ticket corporate loans granted