PSU banks have to stop becoming piggy-banks for politically friendly businesses
Moneylife Digital Team 11 June 2014

According to independent MP Rajeev Chandrasekhar,  the Modi govt should come out with a strategy to restructure and restore the health of these banks that are becoming piggybanks for politically friendly businesses 

Rajeev Chandrasekhar, an independent member of the Rajya Sabha, who is also a member of the Standing Committee on Finance, has called for a strategy to restructure and restore health of public sector unit (PSU) banks in the country.

 

Mr Chandrasekhar was speaking during the discussion on the motion of thanks on the President's address. He said, "The basic principle of fairness and equity stands turned on its head when home owners and two-wheeler owners have their assets seized on default of their loans, when multi-millionaire businessmen who owe Indian banks end up with little or no pain. This situation is neither tolerable nor acceptable, and the Indian PSU banks have to stop becoming piggy banks for politically friendly businesses."

 

He said, "The other big worry is the health of PSU banks – all of which are owned by the taxpayers and public of this country, but seem to have been run like some people’s personal fiefdoms - with the consequence that lakhs of crores of non-performing assets (NPAs) dominate their balance sheets and write off taxpayer equity. Regulatory competence here again needs to be examined which allows 10 industrial groups to borrow almost 90% of the Indian banking system's net worth and create the ‘too big to fail’ syndrome that puts the banks and taxpayers on the hook rather than the promoters."

 

The independent MP said he looks forward to the Narendra Modi government's approach to big business defaulters and a strategy to restructure and restore the health of PSU banks.

 

Mr Chandrasekhar also raised issues like GDP decline, investment cycle and government finances during his speech. "fiscal responsibility and a value for money culture must be brought into the Government. A culture that focuses on what got done, and not just how much money got spent - which seems to be even today the way to measure Government effectiveness. That must change. Public money and assets must be handled by Government with a sense of trusteeship. Public spending is notoriously leaky and fosters corruption, and worst, only a small percentage of spending is reaching people. Fundamental reforms in this area are necessary and long overdue and a new Approach to Government Spending is needed. Reduction of corruption and leakages in public spending is a key requirement to create headroom for Government spending at a time of fiscal constraints," he added.  

Comments
pawan
9 years ago
I request Modi to give a cabinet berth to rajeev Chandrashekhar .. A man of wisdom and forte.
Anil Nair
9 years ago
Bringing up public sector banks would eventually help in improving the economy of the country as the flowing out of money could be controlled.
Anil Nair
9 years ago
Good move by Rajeev Sir. Till now the Rich have been using the private sector banks to paddle their money and take money out of the country. With the change in the banking system the black money trafficking could be brought into control.
Arun Vijayan
9 years ago
It has got a great start. Now everything lies in the hands of our beloved PM Mr.Modi. A restructuring of banking system is needed to stop PSU banks from becoming politically friendly business.
Arun Vijayan
9 years ago
Brilliant move sir!! This wil certainly swipe of the dilemma of 'the rich becoming richer & the poor still poor !'..
tatvapragna
9 years ago
Accolades to this MP. Good to see such real issues raised and debated in Parliament. shocking to learn that 10 (influential, of course) industrial groups are allowed borrow almost 90% of the Indian banking system's net worth!! At least some one is out there talking 'real' issues! interesting to see what Modi will do to such issues.
tatvapragna
9 years ago
Not just on the Modi government's approach and strategy to restructure and restore the health of PSU banks, his every action is being looked forward by the whole nation. every one is waiting for those 'achche din'. Support, timely interventions and monitoring by all MPsm like Mr. chandrasekhar is doing, is absolutely essential.
S.S.A.Zaidi
9 years ago

The article brings out what actually is ailing thed banking system. I think mr Modi being at the helm things will start improving
Business ethics and integrity will be the guiding principles.Organisational culture would be saturtated with ethical values in the conduct of the busibess
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