Letter to BS: PSB lending should be meaningful to prevent capital wastage

This refers to “Time running out for PSBs” (December 27). It is true that private banks have a stronger capital base and less of non-performing assets (NPA) in contrast to public sector banks. The former also laid emphasis on customer satisfaction and service quality to attract and shore up business unlike the lackadaisical approach of many public sector banks. Nevertheless, the significance of public sector banks cannot be overlooked. What is required is meaningful -- and not merely target-oriented lending -- to improve asset quality and prevent capital wastage.

Stricter systems and procedures are essential to regain customer confidence after a series of frauds. Private banks already have taken care of this aspect. Capital infusion can be restricted but not abolished in public sector banks given their compulsion to implement social welfare programmes. The spate of mergers and acquisitions reflect poorly on them. Growth in challenging times is key to survival. Public sector banks have to adopt new technologies and security measures to project a better image and make themselves less vulnerable and globally competitive. 

C Gopinath Nair  Kochi 

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