This refers to Debashis Basu's column "Public sector banks: Mr Modi's nightmare?" (Irrational Choice, June 15). It is true that the remedy to resurrect the ailing public sector banks is to privatise them. All the "trial and error" attempts made earlier have closed the road for their viability, except for treading the path of privatistion. In fact, we are late by a couple of decades. It was suggested to consolidate all PSBs (except the State Bank of India) into four or five entities to compete with private sector banks, when licences were issued to them in the nineties.
All the ideas and recommendations are available with Finance Minister Arun Jaitley. He has to show the willpower and go the whole hog with privatisation to put the Indian economy back on the rails. In view of the Reserve Bank of India's recent directive to borrowing companies, Basu has correctly envisaged the process for takeover/change in the management of the defaulting companies. In addition, the government should strive to divest its holding in PSBs (retaining only 26 per cent) to the private sector banks by way of auction. After acquiring the majority stake in PSBs, private banks should try to recover the dues or put the defaulting company on block - again through the process of auction. The time is ripe for the government to privatise banks, as most of the staff recruited in the expansion phase of the seventies has retired or is on the verge of retirement. As such, there would be less resistance to privatisation. The process should start now, so that the government can give the nation a robust and efficient lifeline of the economy in the 50th year of bank nationalisation.
Naresh Saxena New Delhi
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