Letters to the editor: Confused banks?

Apr 23 2014, 03:19 IST
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SummaryThis refers to the column “Banking on confusing signals” (FE, April 16).

This refers to the column “Banking on confusing signals” (FE, April 16). The author pleads for the elimination of state-owned banks (SOBs). Doesn’t that imply total privatisation of SOBs? Is that feasible, given the political context? It is an open secret that the central government has used the SOBs to get vote-bank mileage. That happened during the last elections in 2008 when farm loans to the tune of R70,000 crore were written off. The banking regulator (Reserve Bank of India) became a mute spectator and could not prevent the government from going ahead. With the likely change of government in May, there is hope that the relationship between the Mint Street and Delhi may improve. That may result in macro-management instead of micro-management of SOBs. One important development in the form of new banking licences is likely to kill the SOBs faster than their natural death. The new banks would take away the creamy business from SOBs and the latter would be left with volume business that is less profitable.

Guruprasad Rao, Bangalore

Tackling corruption

Apropos of the report “Modi on corruption: Won’t waste time on cleaning up old mess” (FE, April 19), governments have risen and fallen over the issue. Laws have been introduced to expose and curb it. So, a system that could minimise is needed. Technological advance couldbe a solutio. But procedures are to be revised to suit it.

Jacob Sahayam


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