Can an RBI Board of Director get away calling Public Sector Bank Executives Scums? Random Reflections By Thomas Franco | May 23, 2022 https://www.cenfa.org/can-an-rbi-board-of-director-get-away-calling-public-sector-bank-executives-scums/
Wikipedia describes Mr S.Gurumurthy as an RSS ideologue, power broker, chartered accountant, columnist, and political and economic analyst.
The intention of the statements of Mr S. Gurumurthy should be analysed and understood carefully. One, he wants to divert attention from the failures of the government and create controversies to divert the attention of the people. Two, he wants privatization of banks but will not call it privatization. He is angry that Unions and Associations are strongly opposing it. In spite of announcing in the last budget 2 banks could not be privatized yet. Three, they want the reservation policy to go. With privatization there won’t be any reservations in jobs. Four, even after 8 years in the government, they want to keep blaming the previous government and hide the write-offs to corporates through the National Company Law tribunal. Five, they want to weaken the Unions and Association in the banking sector by saying the employees are paid less.
Today, the economy is inching towards a crisis. RBI and the government have miserably failed in managing the economy. The demonetization, GST, and the lockdown without warning have taken a toll on the people. And instead of giving relief, we keep taxing the public. RBI’s own decisions like freeing interest rates for Micro Finance Institutions, Co-lending by banks in collaboration with Non-Banking Finance Companies (NBFC) such as Adani Capital, and forcing banks to lend more to NBFCs who can charge any rate to the borrowers, are affecting the majority of the lower and middle-income groups. The after-effects will be seen sooner or later. Yet, Mr Gurumurthy talks of Swadeshi but practices Videshi.
Mr Gurumurthy says the salary of public sector banks is lower than the private sector. This again is not true. On the cost to company basis, it is even better.
Instead of warning Public Sector Banks, Mr Gurumurthy should look at the causes and make a course correction, which RBI can implement. Some of them are:
Implement the decision of RBI taken in 2017 to bring a ceiling of Rs.10000 crore to a corporate as a loan. As recommended, let them go to the market and mobilize funds.
Stop interfering in the affairs of banks and provide them with a certain autonomy. Remove RBI and Finance Ministry nominees in the boards of public banks. Instead, appoint real experts.
Implement the provisions of the law and appoint officer directors and employee directors in public banks. They can be the watchdogs.
Shift focus to small loans directly and not through NBFCs. Stop Co-lending, which is going to be a disaster and fraud. Increase direct lending to agriculture, small traders, SMEs, micro-enterprises, SHGs, and students for education and self-employment.
Announce that there will be no privatization of banks and increase their branch network and staff. Convert the Business Correspondents into regular employees. Bring schemes like the Integrated Rural & Urban Development Programmes.
Provide better salary, pension (Revert to OPS from NPS), updation of pension, perks and work-life balance to bank employees. Banks will perform better. Honest People are not afraid of the Central Bureau of Investigation (CBI) and Central Vigilance Commission (CVC).