Govt will continue to hold 51% in all 20 PSBs: Goyal
Mumbai: Acting Finance Minister Piyush Goyal on Tuesday ruled out the government pairing its stake in public sector banks (PSBs), saying there is no proposal with the government to lower its ownership in state-run banks to under 51 per cent in 20 of them.
The minister also said the government is open to discuss the issues that the Reserve Bank of India (RBI) had raised recently over the lack of powers in regulating state-run lenders.
Amidst criticism that the apex bank had failed in its regulatory oversight over government-owned banks following the Rs 13,500-crore PNB scam, RBI governor Urjit Patel had recently blamed it on the lack of powers to control them.
"The government is open to discuss with the RBI all the issues it has on regulating state-run banks," Goyal told an industry event here this evening.
The statement comes amidst strong opposition from banking and LIC unions to the government plans to sell its majority stake in the crippled IDBI Bank to LIC.
The minister also said that bankers have failed to live up to the high standards and ethics expected of them. He also added that liquidation can't be a panacea for banks to resolve default problems as there are genuine business failures too, which need to be solved.
The minister on his official Twitter handle said, "We've to look beyond our current issues & see how banking can leverage our strengths, & take banking to the remotest corners of India. We could actually get a huge leg up far beyond any additional cost, given that we already have 800,000 employees in banking system."
Reiterating his faith in them, FM added, "I am sure Public Sector Banks will live up to the expectations of the people of India. Govt is backing the Public Sector Banks completely, and each of our banks has played a very important role in economic progress growth & development of this country."
Looking to boost their morale, FM said, "One can take very bold and game-changing decisions when you're conscious of your responsibility to work without fear or favour". He said that if they are clear about business of lending, there can never be a problem. FM concluded by saying, "I believe, whenever we have taken policy-driven decisions, without favour for any individual but taken for class of stakeholders, you don't have to worry about taking those decisions."
Admitting that PSBs had faced political interferences in the past, Goyal said but under this government no minister is interfering in the operational matters of the lenders.
Speaking at the 5th SBI Banking & Economics conclave, Interim Finance Minister Piyush Goyal said that the current government has inherited lots of stressed assets from the past. Banking system has not kept pace with the changing times, said Goyal.
He spoke on a host of issues, including revival path for PSU banks, tackling NPAs and the state of the economy.
Banking in olden days had a lot of promoter credibility, stated Goyal. He admitted that the government implemented core banking reforms but left it half done.
Banking in the last 30 years have not necessarily not moved in a positive direction, said Piyush Goyal.
A day after accepting the Sunil Mehta panel recommendation to set up an asset management company (AMC), that will function like a bad bank to resolve smaller loan defaults of up to Rs 500 crore, Goyal said liquidation can't be the panacea for all NPAs as there are genuine business failures which need to be resolved.