Letter to BS: Can private banks offer services at affordable prices?

This refers to “Accept or not, privatisation is on” (January 13). There is no doubt that the total market share of the banking business, deposits, advances etc of the public sector banks (PSBs) have fallen steeply in recent years and private banks are the major beneficiaries of this phenomenon. But the moot question is whether the private banks have the wherewithal to offer banking services to the millions of lower middle class and poor people in metros, cities, smaller towns and villages at affordable prices? Will the private banks be able to open branches in interiors of states like Uttar Pradesh, Orissa, Assam etc, for those who have come into the financial system as a result of financial inclusion efforts. The answer is likely to be “no”. It is for the government to ensure that PSBs and regional rural banks become more efficient and cost-effective intermediaries. It is time half-hearted measures to improve the functioning of the urban co-operative banks (UCBs) end and more comprehensive steps to bring efficiency and transparency in the functioning of the UCBs are introduced. Arun Pasricha New Delhi