PSBs must be privatised: Assocham

New Delhi: The Rs 11,400-crore fraud at Punjab National Bank should act as a strong trigger for the government to reduce its stake to less than 50 per cent in the banks, said industry chamber Assocham.

These banks should be allowed to work on the lines of private sector lenders with a full sense of accountability to their shareholders protecting interest of depositors.

“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,” it said.

Assocham said that top banking positions are treated as extension of a government job and the senior most manageme-nts spend bulk of their quality time, receiving and implementing directions from the bureaucrats even for innocuous issues.

“In the process, the core banking functions, inclu-ding 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,” said the industry body.