Professional Documents
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exhaustively debated upon the issue in all its forms. It would therefore, be
pointless to delve on the subject. Nearly 15 years after and three regime
changes at the center, one thing that appears quite certain now is that the
reforms are here to stay. Hence, the main purpose of this article is to
discuss whether the objectives of the Banking reforms have been met and
that where is the Banking Sector in India is headed from here onwards.
Despite all the hullabaloo, the performance to the Public Sector Banks is
still far from satisfactory in terms of customer service, operational
efficiency and management of overdue loans or NPAs, tall claims by the
Government notwithstanding. Forget international standards, the Public
Sector Banks in India, are still far behind the new generation Private
Sector Banks. The P.S.
Banks are yet to attain high level of
professionalism and expertise required in the globalized economy. The old
mindsets still persist and the banks continue to function as they were in
the pre reform period despite the facelift. With ever gaping fiscal deficits
in the Governments annual budget, it would be anybodys guess as to
how long the government could afford the bailout packages for the
inefficient Public Sector Banks.
to cronies by the political class has severely impaired the health of the
State Central and Dist. Central Co-operative Banks and other such
institutions.
The current state of affairs of these Banks is a matter of grave concern to
all right thinking workers, leaders in cooperation. It is rightly feared in the
knowledgeable quarters that nearly 80% of these Banks are either sick or
weak. The impaired health of the RRBs is also a major cause of worry to
may Urban Co-operative Banks who have invested, as a regulatory
requirement, their SLR funds with the District Central Co-operative Banks.
Non-payment of deposits by the DCC Banks to the holder Banks, has
severely damaged the profitability of many a urban banks. In some cases,
the good Urban Banks have also sunk with the fall of a DCC bank in their
district.
Death of these Banks would have meant loss of confidence of millions and
millions of small depositors, account holders in the system of cooperation. The co-operation must succeed for the betterment of
underprivileged and economically weaker section of our society for whom
the Urban Banks are the only custodians of their hard earned petty
savings and the real source and succor in their hour of need. Neither the
RBI nor the mandarins of finance ministry are aware of the social issues
involved with the well being of this sector and they have not treated this
sector with the fairness it deserved. Often, it is relegated as State subject.
The challenges ahead for the Urban Banks are manifold. The Reserve
Bank of India therefore has to play even a greater role in helping cooperative banks to overcome the present crisis. Rejuvenating co-operative
banks and co-operative credit system in general, is far more important
than applying mindlessly, what are essentially, alien concepts of
developed economy based on capitalist principles. Considering the basic
mandate of the co-operative sector, it is desirable that these banks should
not be equated with commercial banks and should not be subjected to
rigors of reforms. It is imperative therefore that the Reserve Bank of India
take a more holistic view of the socio-economic conditions prevailing in
the rural, semi-urban or urban regions, where these Banks largely operate
and devise strategies and initiate measures that would, in the time to
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Ram Sharma.