Indian Public Sector Banks and Indian politics
Indian public sector banks are in very bad shape due to its Non performing Assets amounting to Rs 40528 Crores. The public sectors banks shares and reputation have gone down because of the above factors. The King Fisher Airlines ' NPA' of Rs 9000 Crores have added fuels to the fire. The present bad conditions of the banks are due to the politicization of the banks by politicians thereon.
Mahatma Gandhi said that 'If the instrument used for anything is not good than it will bring bad consequences'. The banks were nationalized in the year 1969 for political reasons by Indira Gandhi . Indira Gandhi wanted to show that she is leftist and want to help poor to get bank credits. It was a political move to crush her political opponents without knowing the consequences of her action. Her then Dy Prime Minister and Finance Minister Morarji Desai was for free economy. He had introduced Social Banking Order through which he wanted to compel Banks give 40% of their deposit to priority sector including to poor. This was done in order to avoid nationalization of the Banks. However through political manipulations Indira Gandhi removed Morarji Deasi and nationalized the Banks. It turn out to be politicization of the banks. The NPA of the banks started increasing thereafter. It was too late for government to realize that banks have become a liabilities.
The all India Bank Employees Association has recently published the list of top Fifty defaulters of the Banks amounting more than Rs 40000 Crores. The figures are from reliable sourses which showas very poor state of affairs in the Banks. It may be due to the politicalization of loans and including due to the political appointments on the top management positions of the public sector banks.
The poor affaires in the public sector banks have now encouraged government to issue licences to open banks in the private sector. However how to solve large' NPA' problems of public sectors banks? It is a great loss to the Indian public,
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Indian public sector banks are in very bad shape due to its Non performing Assets amounting to Rs 40528 Crores. The public sectors banks shares and reputation have gone down because of the above factors. The King Fisher Airlines ' NPA' of Rs 9000 Crores have added fuels to the fire. The present bad conditions of the banks are due to the politicization of the banks by politicians thereon.
Mahatma Gandhi said that 'If the instrument used for anything is not good than it will bring bad consequences'. The banks were nationalized in the year 1969 for political reasons by Indira Gandhi . Indira Gandhi wanted to show that she is leftist and want to help poor to get bank credits. It was a political move to crush her political opponents without knowing the consequences of her action. Her then Dy Prime Minister and Finance Minister Morarji Desai was for free economy. He had introduced Social Banking Order through which he wanted to compel Banks give 40% of their deposit to priority sector including to poor. This was done in order to avoid nationalization of the Banks. However through political manipulations Indira Gandhi removed Morarji Deasi and nationalized the Banks. It turn out to be politicization of the banks. The NPA of the banks started increasing thereafter. It was too late for government to realize that banks have become a liabilities.
The all India Bank Employees Association has recently published the list of top Fifty defaulters of the Banks amounting more than Rs 40000 Crores. The figures are from reliable sourses which showas very poor state of affairs in the Banks. It may be due to the politicalization of loans and including due to the political appointments on the top management positions of the public sector banks.
The poor affaires in the public sector banks have now encouraged government to issue licences to open banks in the private sector. However how to solve large' NPA' problems of public sectors banks? It is a great loss to the Indian public,
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