In the edit-page piece, "Robbing Peter to pay banks" (February 13), the writer, T N Ninan, has commented on all factors responsible for the current plight of public sector banks (PSB) in India. Everybody - the Reserve Bank of India, the managements of banks, employees and borrowers - contributed to the mess, but past political masters brought the situation to such a head that the well-intentioned current finance minister and prime minister are finding it difficult to set it right.
Soon after this government over in May 2014, bank chiefs were asked to present their case before it. The government suggested a seven-pronged rescue plan, Indradhanush. But it soon realised the mess was much bigger than what the bank chiefs had let on.
The United Progressive Alliance, through its first and second terms, is responsible for the mess. Of course the ground for it was prepared way back in 1969, when then prime minister Indira Gandhi nationalised 14 banks, and seven others in 1980. Bank unions welcomed the move as they knew that work culture would not be stressed upon under government ownership. So, their members would get salaries even if they did no work or were pathetic in their approach to customers.
As for government interference, there are a number of examples: farm loan waivers before the 2009 general elections; directives for augmenting retail loans without a matching accountability by the Centre; selecting bank chiefs though a system that allowed only a few chosen names to filter through to an appointments panel; and bank chiefs chosen thus, who kowtowed to their political masters. Bank chiefs were handed an unwritten agenda: boost the portfolio that fetches votes for the rulers in New Delhi.
Taxpayers have to take a hit to rescue PSBs. We have a big stake in getting them back to good, if not robust, financial health. That is the price we have to pay for electing politicians, who misuse their positions.
K V Rao Bengaluru
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