Government and Its Adaptive Ignorance

The nationwide strike by bank employees against the privatisation of public sector banks affected the financial sector across the country. And the finance minister responded by assuring that pay and pensions of employees of privatised banks will continue to be protected. But the government refuses to acknowledge the huge contributions of public sector banks and also ignores the lackadaisical performance of the private sector banks, which, except in the case of a few outliers, continue to largely focus operations in urban areas and on high-end users who can afford to pay their exorbitant charges. In fact, even today the complaints against overcharging without prior notice by private sector banks far outnumber those against public sector banks. So, privatisation and a larger market share of private sector banks would only end up in increasing the costs of banking services without any other significant commensurate benefits.

This is obvious as the government wilfully continues to obfuscate the fact that inefficient management and corrupt practices by the private sector banks had forced the Reserve Bank of India (RBI) to step in and rescue almost a dozen private sector banks from collapse by merging them with other healthier banks in the last two decades. In fact, the near collapse of Yes Bank, the fourth largest private bank, last year, had badly shaken even the public confidence in the banking sector.