The legacy issues of public sector banks

Disappearance of public sector banks will be resented by the common man

On bank recapitalisation, Finance Minister Nirmala Sitharaman had this to say in her Budget speech: “Having addressed legacy issues, public sector banks are now proposed to be further provided Rs 70,000 crore capital to boost credit for a strong impetus for the economy.”  

But what are the legacy issues? The basic objective of nationalisation of banks in 1969 was to establish supremacy of the prime minister of the day in the Congress Party. That objective was well-served. 

The far-reaching consequences of that particular decision unraveled over time. It provided an extra budgetary source of immense and growing magnitude to the government, which