Rai believes that public sector banking needs a mindset change to be more ‘nimble-footed. He says, government can’t own 24 banks and that the “elephant must learn to dance”
Banks Board Bureau (BBB) Chairman Vinod Rai on Tuesday said he believes the government should reduce its stake in public sector banks over a period of time.
In an interview to CNBC TV18, Rai opined that public sector banks need a mindset change and need to be more ‘nimble-footed’ than they are right now.
“The elephant must learn to dance,” the BBB Chairman told CNBC TV18.
The interview came merely a week after Rai wrote to the Finance Minister on the issue.
While the Finance Minister ruled out privatisation or consolidation of government-owned banks for next one year, Rai said consolidation of state-owned banks is a must and that it will have to come about.
The government cannot own 24 banks, he said, adding it will have to draw down its equity in PSU banks over a period of time.
Rai, who is a former Comptroller and Auditor General (CAG), was given charge of professionalising PSBs, ensuring efficient delivery, and making the appointment process at PSBs more objective, when he was asked to head the BBB in February 2014.
On 2G verdict
With the notorious 2G scam verdict in December dismissing Rai’s assessment while he was the CAG, Rai said the verdict has not changed him in anyway. He also does not think it has lessened the stature of institutions in any way.
Over three months ago, a special court acquitted all 19 accused, including former telecom minister A Raja and DMK leader Kanimozhi in the Enforcement Directorate’s money laundering case relating to the 2G scam, that was unearthed by Rai while he was the CAG from 2008 to 2013. He has calculated the nation’s loss due to the scam at a massive Rs 1.76 lakh crore in the assessment of the flawed 2G spectrum allocations.
Rai said he believed in doing what he was mandated to do and doing it well.
