The Hindu Business Line : Bank reforms

The committee on Financial Sector Reforms headed by Dr Raghuram Rajan, Professor, University of Chicago and former IMF Chief Economist, has suggested, among other things, that banks have to be de-linked from government (Business Line, April 8).

This is, undoubtedly, a laudable suggestion as leaving the banks free from government intervention can help the former function better. But how can it help achieve an egalitarian society, which India is committed to?

Also, the Committee’s suggestion that opening up branches must be left to the discretion of banks themselves certainly cannot help develop the rural areas.

One cannot be oblivious to the fact that 14 banks were first nationalised in the country in 1969 (and later some more) because of the private banks’ reluctance to start branches in rural areas.

Reforms in the banking sector must not only help banks get considerable profits in their venture, but also achieve the overall objective of the nation — putting in place a socialistic pattern of society, which, of course, is not feasible with a laissez faire policy.

S. Ramakrishnasayee Ranipet

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