None can dispute the beneficial impact of bank nationalisation on the Indian economy but let us not forget that everything is transient in its time and place (Editorial page, “Economic milestone and a poignant anniversary”, August 9). There are obvious unwanted consequences and developments that call for change now. The recommendations of the Narasimham Committees on banking sector reforms in the 1990s deserve a closer look. The point of non-performing assets, the inherent deficiency of public sector banking in many areas and new issues require a holistic look. Other issues include mergers of banks, the structure of non-banking financial companies and small- and medium-enterprises, holistic consolidation in banking and industrial structures. Change is of the essence.
K.U. Mada,
Mangaluru
The fact that much of the growth of agricultural credit since 2001 has been cornered by “big agri-business farms and corporate houses located in urban and metropolitan centres” goes against the basic credo of nationalisation. Other points in the article highlight the need to expand the rural banking network and instructional credit. That privatisation of nationalised banks is a panacea for all the ills of the banking sector would spell disaster for the rural economy. It would be far more prudent to correct systemic faults that have crept in the sector in the course of the last 50 years than reversing a policy measure that has made financial inclusion a reality. Even merger to create a few leviathans may prove to be counter productive.
Kosaraju Chandramouli,
Hyderabad