The list of government sector banks facing loan defaults only seems to be growing longer (“CBI books head of Rotomac pens for ₹3,695 crore default”, February 20). There appears to be a lack of controls in sanctioning loans and following procedures in loan recovery. While an ordinary citizen is put through an obstacle course to borrow small sums, there appears to be no such issue for big borrowers with clout. Quick sanctioning of loans is welcome but not at the cost of bypassing checks and balances. The role of internal and external auditors needs to be investigated as well. With such a multitude of frauds and non-performing assets, has the time come to privatise government sector banks?
D.B.N. Murthy,
Bengaluru
The recent exposure of huge corporate defaults has become an occasion to bash government-owned banks and their staff as being inept and dishonest. People don’t seem to realise the strategic role played by public sector banks in the economy. Unlike private sector banks that focus on less risky, personal segment loans, public banks lend to the productive sectors such as agriculture, small and medium industries and businesses. These banks fulfil social commitments such as catering to unbanked areas and lending to the weaker sections under government-sponsored schemes. They also finance huge infrastructural projects that cause an asset-liability mismatch in their balance sheets.
Nothing can be more reckless than talk of privatising public sector banks. It is like asking the government to hand over India’s space and nuclear industries to the private sector. If public banks are privatised, vital sectors of the economy will lose access to affordable credit. Class banking will replace mass banking as the defining paradigm of the banking sector. The government and the Reserve Bank of India will have to equip public banks with the wherewithal to improve their professional efficiency and to put in place robust mechanisms to check insider corruption (“CEA rues breakdown of banking controls, rules” and “AIBEA flays call for privatisation”, both February 20).
V.N. Mukundarajan,
Thiruvananthapuram
It is amusing to find advocates of bank privatisation scaling up their pitch by citing the Nirav Modi episode. The advent of the neo-liberal economy has been accentuating the frenzy for capital amidst the greed of individuals. No one is looking at the roots of the evil. The monumental contributions of nationalised banks in the growth of the country cannot be erased easily. Let exemplary punishment be meted out to those abetting the offenders. The issue is not about the ownership of the institution.
S.V. Venugopalan,
Chennai
That the financial burden businessmen-turned-glorified fraudsters have piled on the economic foundation of the country is huge is a foregone conclusion. This will eventually be spread on the larger population and extracted through covert taxes and policies coated in fiscal jargon. This fatalistic cycle is no longer shocking. But what angers and frustrates many of us is the modus operandi that these high-profile individuals use to sneak out of the country. They appear to be tipped off in the nick of time and reach faraway shores beyond the so-called long arm of the law. Authorities, ministers and politicians who trade allegations are only creating a miasma and fooling us all. The only question we have is this: How could they all flee in time? No amount of fiery speeches or vows about having them extradited and the guilty punished will answer this.
Sham Sankar,
Thiruvananthapuram
