Poor performance of PSB banks.

The reasons for PSB's poor performance can be easily attributed to the intervention by the Government and the Regulator in their functioning. Right from the appointment of Board of Directors and Chairman to the day to day operations of the banks, Government interference is there directly and indirectly. Banks are not allowed to run on professional lines and the advances portfolio of banks are as per the directives of the Government and the Board of Directors under the influence of big business groups. A large segmentation of NPAs is with the knowledge of Banks' management and nothing can be done about it unless and until a self disciplining mechanism irrespective of the background of borrowers is introduced. Write off of loans and some of the major expenditures need close monitoring in PSBs and the Board of Directors from the Government and RBI should be removed. The appointment of Directors need to be merit based and not influence based as it is happening now. Will the Government show some guts to bring some changes and discipline?

Dr.T.V.Gopalakrishnan

(This comment appeared in Business standard is in response to an article by

T N Ninan: Money in those vaults Why do govt banks command such little value when they account for three quarters of total banking?)