NPA mess: Govt open to more powers for RBI, indicates FM

Tribune News Service

Mumbai, July 3

Finance Minister Piyush Goyal on Tuesday indicated that the government was open to granting more regulatory powers to the Reserve Bank of India over the public sector banks.

Speaking at the fifth State Bank of India Banking and Economics Conclave here on Tuesday, Goyal acknowledged criticism by RBI Governor Urjit Patel in this regard. “The government is open to discuss with the RBI all the issues it has on regulating state-run banks,” Goyal said.

The minister noted that the banking sector failed to live up to the high expectations of the public. “Bankers have failed to live up to the high standards of ethics expected of them,” he said.

The minister also pointed out that the government would not reduce its stake in public sector banks below 51%. He refuted reports that the government’s stake in 20 PSU banks would be reduced. Goyal pointed out that PSU banks suffered from political interference in the past but no minister in the present government was interfering in the operational matters of banks.

The minister further pointed out that tough measures were required to reform the banking sector. He added that the government was determined to clean up the NPA mess created by previous governments.

In his speech, Union Minister Arun Jaitley, who spoke from New Delhi via video-conferencing, said the government was working to resolve issues that were slowing down the economy. He pointed out that the government has successfully improved revenue collection.

Jaitley also blamed the previous government for leaving a number of legacy issues unaddressed. He said the earlier government sought to “hide the banking mess” and tried to “sweep under the carpet”.