'Govt’s approach to PSB privatisation would give better outcomes'

NEW DELHI: On Friday, the RBI issued a clarification notification stating that the views expressed in its recent article, “Privatisation of Public Sector Banks: An Alternate Perspective, “ do not represent the views of the bank and are of the authors.

It also said the authors are of the view that the government’s approach to privatisation of PSBs would result in better outcomes. The article was authored by the researchers at RBI.

In the article, the authors argued that a gradual approach to the privatisation of the public sector banks (PSBs) in India is better than the big bang approach. It said, “During such stress periods if stronger PSBs had not existed, the destabilising impact on the banking sector and the economy would have been much greater.”

However, the clarification said, “The researchers are of the view that instead of a big bang approach, a gradual approach as announced by the Government would result in better outcomes.”

“Recent mega-merger of PSBs has resulted in the consolidation of the sector, creating stronger and more robust and competitive banks,” it added.