The infusion of fresh capital into public sector banks will be without purpose unless long-standing governance issues such as political interference in lending and remote control of decision-making processes using pliable appointees are addressed (OpEd Cartoon, October 30). The cartoon was succinct. Powerful corporates will continue to flex their financial and political muscles in the appointment of CEOs of their choice.
The Banks Board Bureau is turning out to be a damp squib.
The decision on the infusion was a knee-jerk reaction which stemmed from the government’s need to be seen as doing something to stop the economy from sagging. Unless steps are taken to plug accretion of fresh NPAs, recapitalisation will only amount to throwing good money after bad and provide an escape route to wilful defaulters.
Manohar Alembath,
Kannur, Kerala