Limit govt role in bank operations: NK Singh

NEW DELHI: The heavy hands of the government in the banking operations should be done away, which will induce greater operational freedom. This was indicated by the NK Singh, member of Planning Commission, while listing out government’s unfinished agenda at Bank Economist Conference hosted by Corporation Bank.
Among other things, he said that there is a need to improve HRD and implement modern technology among the public sector banks. He also indicated that government passed 40 bills in the last winter session, however, the bill to bring down government stake to 33% in public sector banks and Fiscal Responsibility Act hang in fire.
Mr Singh hinted that the cost of finance for banks still remains high. He said this is largely due to high transaction dues and “an animal called NPA.�
He said that China is not disturbed by its huge NPA because the country has massive FDI inflows compared to India. Moreover the cost of servicing these loans is cheap, ranging from 1-2%.
He said, the suggestions made by the 10th five year plan offers greater lending opportunities for the banks. Around Rs 50,000 crore of additional investments would be required for the golden quadrilateral projects that connects India by road from East-West-North-South. Besides this, huge investments would be required in the telecom sector.
Speaking at the same seminar, KV Krishnamurthy, chairman of Bank of India said, banks which are not capable of transforming themselves as serious financial sector players will not survive.