Govt to gain the most from PSU bank reforms

...........Incidentally, weeks after the Nayak committee was constituted in January, RBI wrote a long letter to then financial services secretary Rajiv Takru on what ails the public sector banks. Many of the issues that have been raised by the Nayak panel—ranging from tenure of the chairman to composition of a bank board and government ownership—were highlighted in the RBI letter. Takru got back to RBI, defending the government’s stance on almost each and every issue. He even took the blame for rising non-performing assets of the public sector banks as the government pushed these banks to give many project loans in the wake of the North Atlantic financial crisis in 2008-09. The central bank has subsequently written back to Takru’s successor, G.S. Sandhu, refusing to accept the government’s arguments ..........

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