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Apropos the news item “PSBs want Fed Reserve to ease acquisition norms” (Business Line, January 29), the logic of public sector banks going for acquisition of US banks badly affected by the sub-prime crisis is questionable. It is a case of diverting our national savings to fund and finance the irrational credit exuberance of financial players in the US.

At a time when the household savings of PSBs, which constitute three-fourths of banks deposits in India, have to be utilised for the development and welfare of the people of India and to find solutions for financial exclusion, it is unwise to channel the people’s savings to save sinking American banks.

Instead, PSBs must concentrate further expansion of branches in the country especially in rural areas and for reaching vast sections of masses.

It is high time the Government of India and the Reserve Bank of India set their priorities right so as to realise the objectives of mass banking practices in the country.

K.S. Krishna Ernakulam

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