Business

After ASSOCHAM, FICCI Calls For Privatisation Of banks

SHAHNAWAZ | 1
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| February 28 , 2018 , 17:01 IST

Following the multi crores bank fraud committed by Nirav Modi, Mehul Choksi and associates, several bank fraud cases have come out in public with CBI lodging multiple FIRs against companies and promoters for cheating and scamming Public Sector banks of crores of rupees.

Industry chamber ASSOCHAM recently came out with a statement asking the Government to reduce its majority holding in the PSBs in order to ensure accountability and transparency in the banking system of the country.

FICCI too has joined the league asking the Government to look at selective privatisation of Public Sector banks as a long-term solution.

Welcoming the Government move asking the MD's of all PSB's to investigate NPA accounts above Rs 50 crores, FICCI President Rashesh Shah in a statement said that the move will help in ensuring the much-required cleansing of the banking system and the establishment of a transparent and effective risk management mechanism in the functioning of these banks.

He cautioned the Government that the investigations should not cripple lending thus dampening the business sentiment further.

Also Read: ASSOCHAM Asks Govt To Cut Down Stakes In Banks To Below 50%

"With continuous efforts from the government and RBI, PSBs should strengthen their risk management practices with an immediate sense of urgency. Simultaneously with the action on the existing NPA accounts, an effective time-bound action plan for infusing transparency and a robust risk management system in these banks is a necessity," the statement reads.

"Overall, the government's strategy towards NPA resolution through IBA, strict action against frauds and wilful defaults, and strengthening of PSBs, will help in dealing with the existing issues. The larger and long-term solution, however, lies in the rationalisation, consolidation and selective privatisation of PSBs," it further reads.