This refers to the report "Tata says bye to banking" (November 28). Internal reasons and complexities seem to have discouraged the Tata Group from entering the banking space. The reasons have, however, come as a blessing in disguise for the group. The very nature of the banking business has become competitive. Those who have opted out of the banking race will eventually celebrate their decision, and those who have been granted licences will regret their diversification. It is not the Reserve Bank of India's mandates that would mar their prospects. Shrinking net interest margins, continuing defaults resulting in higher level of non-performing assets, poor legal solutions, are enough to kill the industry. If ever some banks has succeeded (read HDFC Bank, Axis Bank) in this space, it is difficult to copy their strategies. Public sector banks (PSBs) may have a large chunk of business but, the private sector banks have scored over them. That has happened because of the high-value/low-volume business strategy these banks have followed. The high-value business has simply walked out of PSB portals, thanks to their lethargic approach and poor decision-making.
K V Rao, Bangalore
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