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Letters: Not the need of the hour

Business Standard  |  New Delhi 

With reference to “Why merge public sector banks?” by (October 19), the of the state-owned banks is not the panacea to mounting bad assets. The rising cost of credit, the non realisation of the accumulated unrealised interest and the dismal business performance of the (PSBs) need positive speedy corrections.

Despite the ongoing economic  reforms, cash generation in specific sectors — infrastructure, power, telecommunications, and iron and steel — are not rising sufficiently to service the owing to the banking sector. At this juncture it will be pragmatic to look for more aggressive measures to resolve issues which are adversely affecting the soundness of the banks.



Each of the small and large state-owned banks have their own strategy and ways to deliver better results without compromising their commitments to social banking. These banks have their own legacy and work culture. While it is true that the will lead to consolidation, the merged entities would still be facing critical issues. As such, the merged entity will not be able to deliver better results immediately, due to the elevated level of the bad assets.

For the time being, the government and the banking regulator should not look at mergers, but should initiate speedy execution of the reforms. Stringent actions need to be taken against the defaulters to drastically improve the recovery of the unrealised interest, bad assets and the written off loans. If this materialises significantly, it will enable PSBs to regain its lost health which is the urgent need of the hour.

V S K Pillai, Kottayam


can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201  ·  E-mail: letters@bsmail.in
All must have a postal address and telephone number

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Letters: Not the need of the hour

Each of the small and large state-owned banks have their own strategy and ways to deliver better results without compromising their commitments to social banking With reference to “Why merge public sector banks?” by (October 19), the of the state-owned banks is not the panacea to mounting bad assets. The rising cost of credit, the non realisation of the accumulated unrealised interest and the dismal business performance of the (PSBs) need positive speedy corrections.

Despite the ongoing economic  reforms, cash generation in specific sectors — infrastructure, power, telecommunications, and iron and steel — are not rising sufficiently to service the owing to the banking sector. At this juncture it will be pragmatic to look for more aggressive measures to resolve issues which are adversely affecting the soundness of the banks.

Each of the small and large state-owned banks have their own strategy and ways to deliver better results without compromising their commitments to social banking. These banks have their own legacy and work culture. While it is true that the will lead to consolidation, the merged entities would still be facing critical issues. As such, the merged entity will not be able to deliver better results immediately, due to the elevated level of the bad assets.

For the time being, the government and the banking regulator should not look at mergers, but should initiate speedy execution of the reforms. Stringent actions need to be taken against the defaulters to drastically improve the recovery of the unrealised interest, bad assets and the written off loans. If this materialises significantly, it will enable PSBs to regain its lost health which is the urgent need of the hour.

V S K Pillai, Kottayam


can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201  ·  E-mail: letters@bsmail.in
All must have a postal address and telephone number
image
Business Standard
177 22

Letters: Not the need of the hour

With reference to “Why merge public sector banks?” by (October 19), the of the state-owned banks is not the panacea to mounting bad assets. The rising cost of credit, the non realisation of the accumulated unrealised interest and the dismal business performance of the (PSBs) need positive speedy corrections.

Despite the ongoing economic  reforms, cash generation in specific sectors — infrastructure, power, telecommunications, and iron and steel — are not rising sufficiently to service the owing to the banking sector. At this juncture it will be pragmatic to look for more aggressive measures to resolve issues which are adversely affecting the soundness of the banks.

Each of the small and large state-owned banks have their own strategy and ways to deliver better results without compromising their commitments to social banking. These banks have their own legacy and work culture. While it is true that the will lead to consolidation, the merged entities would still be facing critical issues. As such, the merged entity will not be able to deliver better results immediately, due to the elevated level of the bad assets.

For the time being, the government and the banking regulator should not look at mergers, but should initiate speedy execution of the reforms. Stringent actions need to be taken against the defaulters to drastically improve the recovery of the unrealised interest, bad assets and the written off loans. If this materialises significantly, it will enable PSBs to regain its lost health which is the urgent need of the hour.

V S K Pillai, Kottayam



can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201  ·  E-mail: letters@bsmail.in
All must have a postal address and telephone number

image
Business Standard
177 22