The government is considering a proposal to privatise some state-owned banks in phases.
The only feasible way to have a healthy banking sector could be making it mostly private, along with two or three large, better-run government banks, suggests T N Ninan.
RBI says haste in easing norms for banks harmful to economy.
Of the three major Budget announcements related to the banking sector, privatisation of PSBs is the most audacious, says Tamal Bandyopadhyay.
The government must set up a Bank Investment Company to shrink its role in PSBs, if we are serious about tackling the two persistent issues - lax corporate governance practices and discretionary decision-making, says Shyamal Majumdar.
'There is a law that prevents the government from diluting its equity in the PSBs below 50 per cent.' 'That law has to be amended and given the parliamentary arithmetic of the political parties, it is not as simple to do that.'
The government will not bring down its ownership in public banks.
The rally followed the govt's plan to bolster state-owned lenders.
Indradhanush-II is likely to chart out the process for resolution of non-performing assets.
Banks will need more funds, as they have to provide more capital.
A Bank Investment Company to act as a holding company for state-owned banks would go a long way in minimising government interference and improving governance.
Many bankers say the move will have a serious impact on the chain of command of nationalised banks and that it would only enable the government to dish out favours to a few of their own men.
'The world is going to be more insular.' 'What India needs to do is develop the domestic market for domestic consumption.' 'The emphasis has to be on Bharat as against India.'
Non-Performing Assets are a wake-up call for public sector banks.
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At the retreat, PSBs had suggested the government cut its stake in these entities to less than 51 per cent over a period of time and empower the boards of individual banks.
The government package for public sector banks, announced last Friday, has been welcomed by the stock market with the PSU banking index booking smart gains.
Banks in India must have a modern approach, suggests a panel comprising of banking bigwigs.
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