This refers to your report “Large lenders asked to handhold small banks” (October 25). The finance ministry’s move to make another “tier” will embarrass the boards of smaller banks. It’s yet another agency to scrutinise their advices.
That banks have been asked to work collectively on several issues is perhaps a euphemism for introducing a dull uniformity in their risk assessment and human resources areas. If the finance ministry wanted standardisation of procedures, why did it not go for the straightforward step of consolidating the entire lot of PSBs into a monolith? However, this move would, of course, be viewed by people with certain discomfort, considering the government’s failure to merge just two state-owned airlines successfully. Also, did the government carry the banking regulator along while introducing this crucial decision of adding a new tier? Is this one more instance of the finance ministry trying to micromanage decisions for individual banks?
S Subramanyan Navi Mumbai
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