Business

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

SHAHNAWAZ | 0
4378
| February 18 , 2018 , 14:29 IST

Industry Body ASSOCHAM has asked the Government to bring down its stakes in banks down to below 50%. A statement from ASSOCHAM says the PNB Fraud should act as a strong trigger for the government for reducing its stake to less than 50 percent in banks allowing them to function on the lines of private banks so as to infuse a full sense of accountability.

Also Read: PNB Fraud: UCO Bank Says It Has More Than ₹2600 Crore Exposure

"The PSU banks, ironically, are slipping from one crisis to the other and there is a limit the government can keep bailing them out at the cost of taxpayers' money, even if it is the principal shareholder in these lenders” the statement reads.

 “The top banking positions are treated as an extension of a government job and the senior most managements spend bulk of their quality time, receiving and implementing directions from the bureaucrats even for innocuous issues. In the process, the core banking functions, including all important risk mitigation and management, take a back seat. The problem has become more grave with the banking adopting to new technologies which can prove both boon and bane, depending on how effectively they are implemented", the statement. 

The chamber believes that this would lead to more autonomy along with accountability and responsibility of the senior management.