This refers to “Raising the bar” (editorial, Sept. 1) on the set of “draft” guidelines issued by the Reserve Bank of India permitting the entry of new private banks. It is quite paradoxical that our policymakers cry from the rooftops for merger of public sector banks while simultaneously opening the gates to more private banks. The disastrous collapse of the much talked-about private banks is a matter of the immediate past that demands a serious study and reversal of wrong policies. The government has done precious little on rural credit despite the shocking number of farmers' suicides. The record of private banks in this area is well known. Further, the draft guidelines pose a threat to hard-earned savings in these new banks, enabling take over by foreign capital after five years of inception.
The issues raised by employees of nationalised banks must be taken note of.
Further to the Finance Minister's budget speech in March 2010, the modified policy on the opening of new branches by promoters and corporate bodies has assumed importance. The recent RBI amendments issuing licences for opening new branches have taken a pragmatic view towards enhancing the Indian economy. The banking sector can now reach remote corners of the country.