GET Stock QuotesNews18 APP
News18 English
Powered by cricketnext logo
»
1-min read

FM Arun Jaitley Rules Out Privatisation of State-run Banks

In light of the PNB scam that has rocked the Indian banking system since February 14, the industry chambers FICCI, ASSOCHAM and CII have urged the government to surrender its majority control of banks and allow them to function like private sector lenders.

IANS

Updated:February 24, 2018, 9:51 PM IST
facebookTwittergoogleskypewhatsapp
FM Arun Jaitley Rules Out Privatisation of State-run Banks
Union Finance Minister Arun Jaitley. (File image)
Loading...
New Delhi: Following the Rs 11,300 crore Punjab National Bank fraud by accused diamond trader Nirav Modi, Finance Minister Arun Jaitley on Saturday ruled out privatisation of public sector banks (PSBs), saying the move may not find political consensus.

In light of the PNB scam that has rocked the Indian banking system since February 14, the industry chambers FICCI, ASSOCHAM and CII have urged the government to surrender its majority control of banks and allow them to function like private sector lenders.

"This (privatisation) involves a large political consensus. Also, that involves an amendment to the law (Banking Regulation Act), as well as amendment in the political consensus," Jaitley said at the ET Global Business Summit here.

"My impression is that Indian political opinion may not find favour with this idea itself. It's a very challenging decision," he said.

Industry chamber Assocham said last week that the PNB scam should act as a "strong trigger" for the government to surrender its majority control of banks which should then be allowed to work on the lines of private sector lenders with a full sense of accountability to their shareholders and protecting interest of depositors.

Noting that recapitalisation of state-run banks over the last decade has had little impact on improving their health, the Federation of Indian Chambers of Commerce and Industry (Ficci) called for their privatisation in the interest of creating "a dynamic banking sector" in the country.

Jaitley said the question of "moral hazard" comes up in using taxpayers money to recapitalise banks that are hugely stressed on account of their accumulated non-performing assets (NPAs), or bad loans.

The accumulated NPAs in the Indian banking system have crossed a staggering Rs eight lakh crore, with PSBs themselves accounting for over Rs seven lakh crore of bad loans.

In the face of this, the cabinet, in October 2017, approved a recapitalisation plan for PSBs worth Rs 2.11 lakh crore.

On Friday, Ficci President Rashesh Shah told reporters he had met the Union Finance Minister with a request to begin the process of bank privatisation in a phased manner, leaving just a handful of lenders in the public sector.

The Chief Economic Advisor (CEA) Arvind Subramanian has also advocated more private participation in public sector banks.
| Edited by: Bijaya Das
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Vedanta 207.35 2.85
Yes Bank 182.40 1.14
ICICI Bank 358.85 1.97
Maruti Suzuki 7,759.00 1.26
Tata Motors 173.75 4.07
Company Price Change %Gain
Yes Bank 182.30 1.08
Vedanta 207.35 3.06
Tata Motors 173.70 4.07
Maruti Suzuki 7,755.85 1.33
Reliance 1,124.45 1.14
Top Gainers
Company Price Change %Gain
Tata Motors 173.55 3.95
Power Grid Corp 191.70 3.23
Vedanta 207.35 2.85
Wipro 340.65 2.27
ICICI Bank 358.95 2.00
Company Price Change %Gain
Tata Motors 173.50 3.95
Power Grid Corp 191.75 3.37
Vedanta 207.40 3.08
Wipro 340.45 2.21
ICICI Bank 358.55 1.83
Top Losers
Company Price Change %Gain
Bajaj Finserv 6,077.00 -1.63
Indiabulls Hsg 781.10 -1.49
Kotak Mahindra 1,240.70 -1.21
Infosys 697.95 -1.15
Hero Motocorp 3,282.00 -0.99
Company Price Change %Gain
Infosys 698.00 -1.08
Kotak Mahindra 1,240.85 -1.15
Hero Motocorp 3,280.45 -1.00
Bharti Airtel 317.70 -0.35
SBI 289.00 -0.05

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results