Agencies, New Delhi
The apex chamber ASSOCHAM on Sunday said that the Punjab National Bank’s (PNB) fraudulent transactions worth Rs 11,400 crore should act as a strong trigger for the government for reducing its stake to less than 50 per cent in the banks which should then be allowed to work on the lines of private sector lenders with a full sense of accountability to their shareholders protecting interest of depositors.
Reacting on the scam, ASSOCHAM in a statement said, “The PSU banks, ironically, are slipping from one crisis to the other and there is a limit the government can keep bailing them out at the cost of taxpayers’ money, even if it is the principal shareholder in these lenders.”
ASSOCHAM said that the top banking positions are treated as extension of a government job and the senior most management spend bulk of their quality time, receiving and implementing directions from the bureaucrats even for innocuous issues. In the process, the core banking functions, including all important risk mitigation and management, take a back seat.
“The problem has become more grave with the banking adopting to new technologies which can prove both boon and bane , depending on how effectively they are implemented”, ASSOCHAM stated.
The Chamber said that once the government equity in the banks is reduced below 50 per cent, there would be much more autonomy along with accountability and responsibility of the senior management. The boards should then be truly taking the policy decisions while the CEOs would run the banks with full authority, coupled with the commensurate responsibility, instead of looking towards the bureaucrats for directions.
The Chamber General Secretary D S Rawat said, “There is an onus on India Inc as well. There are two sides of a coin. If one side represents the bank managements, the other side which involve the borrowers, mostly the large sized corporates, represents India Inc. Any unsavoury incident, then leaves both sides of the coin smudged. It was time the industry also did some introspection.