Banking gets a boost

Apropos the report "Banking reforms: Government sets the ball rolling" (March 1), while the approval of inflation targeting measures and revised priority sector lending norms are appreciable, the government's move to refrain from infusing capital to some public sector banks to comply with the Basel II capital requirements would negatively impact the growth of these banks.

The government needs to implement tough measures in these banks to turn them efficient within a short span of time. The proposal to introduce a bank board bureau would pave the way for banks to gain competent professionals. With the implementation of the proposed comprehensive bankruptcy code, the menace of growing loan defaults would decrease. Besides that, the government should empower banks with more tools to deal with the defaulters.

The proposal to set up a Micro Units Development Refinance Agency (Mudra) Bank is another welcome decision, which would boost the flow of micro credit, especially to rural areas.

V S K Pillai, Kottayam

Letters 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 letters must have a postal address and telephone number