Tamal Bandyopadhyay’s insightful article “Bravo FM, but it’s only half the job done” (September 9) gives a realistic recap of the progress of the banking sector in India post-nationalisation and gives practical suggestions for making the current phase of banking consolidation purposeful. India might be the only country which has deployed the resources and outreach of banks as an effective tool in the nation’s economic development with focus on financial inclusion. The credit goes to the government as the owner of public sector banks and the Reserve Bank of India as the regulator and supervisor of the banking system that whatever has been achieved by financial intermediation across sectors was done without much damage to the institutional system. This was made possible by timely intervention to restructure and reorganise the banking infrastructure, by the reorganisation of existing institutions and the introduction of new players where necessary. The present merger of 10 PSBs to form four is a continuation of such efforts.
So long as banks continue to mobilise resources using the public deposit route, they will not be able to get away from the responsibility to provide need-based banking services including lending to priority sectors. The government and the RBI will have to ensure that all banks get a level playing field to manage their businesses professionally. For this, not only banks, but all statutory bodies and PSUs need a free hand, subject only to transparent regulatory mandates, to manage their resources, personnel and day-to-day administration.
M G Warrier, Mumbai
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