Letter to BS: Govt must execute more reforms in the financial sector

This refers to "Celebrating 50 yrs of bank nationalisation" (July 15). The nationalisation of banks during 1969 and 1980 pushed the economy forward by creating jobs and alleviating poverty to a large extent but these banks failed to succeed as commercial enterprises. The work culture and efficiency of these banks gradually declined as they generated bad loans and received low or negative returns.
 
Many reforms have been executed to prevent the public sector banks (PSBs) from decay. However, these banks are still in stress and are incapable to deliver results like their counterparts in the private sector. As a consequence, many investors lost faith in the banks resulting in the need for capital infusion by the government intermittently. The PSBs must serve the purpose for which those had been nationalised but not without compromising the commercial nature of banking. The ongoing and future reforms must aim to rejuvenate the PSBs to enable them to play the roles of a social as well as a commercial banker.
 
These banks must get autonomy and their boards need to be made accountable for inefficiencies. PSBs are not without talent but many a time, the performers are not rewarded. The government failed to make the nationalised banks performing ones. Instead of privatising the nationalised banks, the government must execute more reforms in the financial sector to enable these banks to be more competitive in the market.
 
VSK Pillai, Kottayam
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