This refers to “Modi regime keeps bankers on their toes” (May 22), the support extended to the Reserve Bank of India (RBI) in the cleaning up of banks' balance sheets has been a noteworthy success of the government. However, after so many months only one of the 12 large accounts referred under the Insolvency and Bankruptcy Code (IBC) has seen resolution on account of procedural wrangles and multiple litigations. The process is slow and painful, and doesn't inspire hopes of a quick resolution for other cases to be subsequently referred under the IBC. Delays in resolution hold up a range of things including recovery of dues by banks facing financial stress. The government could have done much more by way of reforms in the public sector banks — reforms by way of better systems for board appointments, professionalisation of the management, reforms of HR processes, changes in the systems of credit sanctions and supervision etc. These reforms would have resulted in better systems and procedures and instilled accountability that would have curbed reckless lending and frauds.
The manner of selecting independent directors also needs to be changed. The government needs to professionalise the management and the board of PSBs to get optimum results.
Arun Pasricha New Delhi
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