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PRIVATISATION OF PSBS A NEW PANACEA
BANKING FINANCE
|February 2022
The country is going through a discussion about privatisation of PSBs and Government is vigorously pulling up for the same.
The country is going through a discussion about privatisation of PSBs and Government is vigorously pulling up for the same. There are two type of thoughts involved one in favour and another against it, Those in favour are giving several logics like PSBs are saddled with NPAs, PSBs are in dual control one by RBI through RBI Act 1934 and one by Finance Ministry By BR Act 1949. So at times Governments through their ministries use PSBs as a tool to further their political gains.
PSBs don't have sufficient Autonomy so they are weak in their business decisions. There is also difference in incentives than their private counterparts which can motivate them to do better. But here we have to understand the goals for which these banks were nationalized i.e. to transfer economic prosperity to untouched masses, to serve the unserved.
The Concept behind Nationalization:
This story is from the February 2022 edition of BANKING FINANCE.
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