Banks bureau wants greater dialogue with FinMin, seeks more mandate

Sanjeev Sharma

Tribune News Service

New Delhi, March 21

The Banks Board Bureau (BBB), headed by former CAG Vinod Rai, in a set of recommendations on reforms in the public sector banking system has said there is a need to remove scepticism to the view that public sector banks can indeed be run in the taxpayers’ interest.

Rai wrote in his foreword to the compendium of recommendations that in the journey to achieve a governance structure in PSBs that will be relevant for a new India, it is unrealistic to expect that nearly half-a-century-old systems and processes, set up in the wake of nationalisation of banks, can be undone overnight.

“After all, it is for all those few who are associated with the PSB ecosystem to align their interests with the interests of the remaining large and silent majority. Not doing so would mean further acceleration of the process of loss of market share, compromise of processes, weakened internal capital generation ability and increased dependency on the resources of the taxpayer”, Rai said.

The Bureau has also sought a large mandate for a recommendatory role on reforms in public sector banks, including advising the Finance Ministry on bank consolidation, strategising on asset quality resolution and governance of banks.