The suggestions made by Rajiv Lall in his article "Privatisation not a panacea for PSU banks" (September 11) to improve the functioning of public sector banks (PSBs) appear reasonable on paper but might not work in practice. The case for majority government stake with professionalised management is weak. Even in the private sector, promoters control companies with much less holdings. To expect the ministers and secretaries to happily relinquish their powers and privileges is romantic. Secondly, pressure from other public sector undertaking employees will make it virtually impossible to create a different salary structure for PSB employees. Further, one can't expect a United Bank of India to be able to pay what the State Bank of India does. Equally difficult will be the possibility of granting a meaningful employee stock ownership plan.
To achieve true competitiveness, PSBs must have their own senior management cadre and the right to sack non-performing executives. Also, banks are not meant to be instruments to deliver the government's social and entitlement programmes. Unless the government reduces its holding to nil or insignificant levels, the dream of professionalised and efficient PSB management will remain elusive.
P Datta Kolkata
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