Urban Mirror Correspondent
New Delhi, December 15: The Lok Gathbandhan Party (LGP) today supported the statement of former RBI Governor Raghuram Rajan that privatization of public sector banks (PSBs) is not panacea of ills afflicting the state-run banks in the country. The LGP said in the past also the party had strongly opposed this demand from some government’s quarters.
The spokesman of the LGP headed by former Secretary Government of India Vijay Shankar Pandey, said here on Saturday that privatization is not an answer to stop corruption and mismanagement in state-run banks. The spokesman that a section in the NDA government and a group of industrialists have raised the privatization demand which is absolutely ill-conceived because the private sector banks in India have failed to fulfil social obligations and also effectively reach out to the common man in far-fetched areas. The spokesman said private sector banks have so far confined their activities to major urban centres, whereas the state-run banks have penetrated into rural areas to provide services to poor villagers. The spokesman said there are large-numbers of government-sponsored socio-economic schemes which could be run through state-controlled banks, as the private sector could not be relied up in this matter.
Pointing out that the issue is not privatization but rampant corruption and collapse of governance in public sectors, the spokesman said over all functioning will have to be improved by imbibing honesty, transparency and dedicated work culture. The spokesman said while large number of bank officers and their political godfathers are corrupt, banking systems and supervision are full loopholes which has led to PNB-type loot and rising non-performance assets (NPAs). The spokesman said instead of talking about directionless privatization plan the government and Reserve Bank of India should implement strong measures to completely eliminate corruption and also ensure stringent punishment to criminals involved in loot the banks. The spokesman said neither the NDA government nor the RBI could absolve themselves of responsibility from the prevailing serious situation in banking sector emerging from PNB scandal. The spokesman said if immediate corrective measures are not taken many more Nirav Modi would stumble out of cupboard. The spokesman said LGP is of the view that by honestly cleaning the system the situation could still be brought back to right track. The spokesman said corrupt bank-politician-businessmen nexus will have to be broken to protect the country from financial terrorism.
