Union Minister of Finance (Temporary) Piyush Goyal has stated that the banking system in India has failed to work according to the expectations of the people and government. The high moral standards that were expected from bank employees did not come true.
Goyal also admitted that there has been political interference in government banks in the past, But no minister has interfered in the functioning of banks in the present government.
Goyal said this a day after accepting the recommendations of the Sunil Mehta Committee to resolve the distressed loans of banks. The committee has suggested to set up an asset management company. It will solve the cases of debts incurred upto Rs 500 crores.He said that the government will provide adequate capital to all the government banks.
He further added that the government is ready to negotiate the powers of the Reserve Bank of India in relation to the regulation of government banks. Recently the central bank raised this issue. It is worth noting that Reserve Bank Governor Urjit Patel, who was facing criticism for failing to closely monitor government banks after fraud of Rs 13,500 crore in Punjab National Bank, had recently said that the regulation of government banks.The Reserve Bank does not have sufficient authority in the bank.
He said that “Government is ready to discuss all issues with the Reserve Bank of India regarding the regulation of government banks.”