PNB scam fallout: Probably some PSBs no longer need to exist, says Debroy

Banks are not under the Companies Act but the Bank Nationalisation Act and as such, government equity has nothing to do with government control

With certain quarters demanding privatisation of public sector banks in the aftermath of the alleged fraud at Punjab National Bank (PNB), Economic Advisory Council to the Prime Minister Chairman Bibek Debroy tells that reducing government equity even to zero would not mean giving up of government control over these banks. Edited excerpts.

After the PNB scandal, there has been demand for privatisation of public sector banks by certain quarters. Does that merit a view? Is there a great deal of trust in the private sector?

I don’t think there is. Public sector banks (PSBs) are reminiscent of the