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The way forward for state-run banks

A more formulaic approach will work better for them, and this has been part of the organisational DNA of the best PSBs in the past

PSBs. (Illustration by Ajay Mohanty)
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PSBs. (Illustration by Ajay Mohanty)

Ajay Shah
Public sector banks (PSBs) are demoralised. They fear the Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC), Comptroller and Auditor General (CAG), and Central Information Commission (CIC). They are short of equity capital. Their corporate credit business is beset with problems. In this article, we offer strategies for the big questions. What should PSBs do with borrowers who have defaulted? How should they make corporate credit decisions?
 
In the long run, India should privatise the PSBs. But this will not happen anytime soon. A large private banking system has a pre-requisite: State capacity in banking regulation. The one thing
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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