BENGALURU: Bankers have been given a major boost by Prime Minister. Narendra Modi assured the state-run banks that the government would not interfere with their day to day operations— as reported by Times of India. This comes as a boost because the banks had to deal with not just political appointments but the late messages they receive from the government to dole out loans and other favors.
Financial Services Secretary, Hashmukh Adhia quoted that, "The Prime Minister has told bankers that they will not get a call from even the PMO." An official statement mentioned that the PM also assured there would be more professionalism in the public sector. The official statement read that, "He said the government had no vested interest and public sector banks can derive comfort from it.”
Modi's assurance came hours after finance minister Arun Jaitley told reporters that, ”banks have to be given a sufficient amount of leeway to deal with commercial issues with a commercial mindset.” He also articulated the need for "far greater autonomy.”
However, the Prime Minister did not mention his support for political intervention in the interest of public if required. RBI governor Raghuram Rajan mentioned the need for enhanced capital base to meet the credit requirements of the economy. Both the government and RBI underlined the need to deal with bad debt and enhance the capital base to help banks meet large funding requirements in the coming years. This is an important measure that needs to be taken care of with priority.
TOI’s sources say that the bankers told the government that they would appreciate if they were relieved off the intrusive scrutiny which often amounted to a judgment call.
Modi even advised the bankers to create entities that rank among the top few globally. An official statement said that, "The PM said the banking sector of a country mirrors its economic rise. Japan and China had banks in the top 10 banks of the world during their economic rise."
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