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The litmus test that the “Banking Industry” in a whole is facing now-a-days is not hidden to anyone. No more hiding behind the bush. Scams, frauds, cheating all different words, but leads to only one thing which is in a way intention hazardous. The fire that has lit up with the PNB scam has not only destroyed the morality of the bankers but along with that it has raised many a questions about the integrity of this industry in a whole and the kind of questions are getting raised out of it can’t even be brushed under the carpet.
The PNB matter is sub judice and it will be improper to get in to any discussion about who is right or wrong. But, it’s understandable about the public anger seeing what has happened recently keeping in mind that the amount of trust and faith they possess in the banking system more over in PSU Banks.
So much serious discussions have taken place at various levels, hundreds of articles haven been published by many a giants of the financial market and many so-called finance intellects have briefed their views about the issue and opined how come privatization will act as a magical wand which will sort out all the issues that the PSU banks are facing currently.
It’s highly unfortunate to say this, but, if privatization is the only suitable answer to the current crisis, considering what our country has seen in recent years across sectors, I doubt most of India would have been grasped by the private bodies by now.
Now its high time to understand, whether “privatization” is the only and proper solution to a problem like what has happened to PNB. Flowing along with the direction of current is always easy but, there should be clarity and proper understanding to every aspect especially when we talk about issues related to “Finance Industry”. It can’t be just a mere discussion which may lead to a casual resolution considering the importance of this sector (finance). A wrong call or dare I say an improper advertisement may make or break a nation, that much highly miniscule of probability of committing mistake is there.
Public sector banks can’t be weighed by putting “profit” in one side and keeping “commitment of all govt. aided financial assistance”, in the other side of the weighing machine, and then it will be treated as a faulty machine considering the huge imbalance that both the aspects brings to the table.
One need to understand the logic behind the creation of PSU banks and when we talk about privatization, we should understand whether the motto that the govt. has had behind the nationalization been accomplished?
Purpose of Nationalization was to meet; now what we call it as “Financial Inclusion” there by providing banking to everyone. Any organization can’t ever be sustained only about opting for the brand tag of “Service” and because of that very fact the PSU banks have diversified their portfolios in to corporate finance, which now is the hot topic of discussion behind all that what is happening.
It has to be understood that what has made the PSU banks to diversify their portfolios and how it has impacted. Financial Market is always risk prone and it should be inferred that there is no reward without taking risk. Every pie of lending has its own risk be it to the corporates or to a common man under financial inclusion.
It can never be inferred that because of the shift of goals i.e from being service oriented to profit oriented that the amount of risk has been amassed to many folds. But, whether these organizations would have continued till this extent and provided the kind of support to the govt. that they have been providing over the years, had they been either not shifted their prime goal of “service” or had they been privatized.
Had it been possible of what we have been boasting for years together about the “Financial Inclusion” being these units under private players? There are always two facets of any coin, but, if it will be kept grounded we can view only one facet. It’s always easy to hit the iron-hard when it is soft, but hitting hard never gives any proper result unless it is properly shaped. But, we being a nation which is growing vastly and having a robust financial system when speak on these tones after a road block scare a many.
Will privatization solve the entire problem? What about the reason behind making these banks nationalized and whether we have reached that target? We being a developing nation can bear the brunt of only profit by sacrificing the fruit of “Financial Inclusion”? Is it possible to perform to those schemes of govt. by diluting the stakes?
Many questions are there which needs to be addressed immediately before we take such a stiff call on “privatization”. Newton’s third law is a universal phenomenon, but the reaction should be in proper spirit considering the action that has affected.
It’s understandable about the public rage but no industry wants to be looted intently or knowingly wants to spoil the brand name that it has created over many years by putting unparalleled hard work and immeasurable commitment.
If all the goals behind the nationalization have been reached, If financial literacy is still possible after dilution of the stakes and if it is guaranteed that no such mishap of this level that has happened in PNB, may happen after the “privatization”, then, I being a banker representing many of my PSU colleagues will be the most happiest person to see this wave of change in near future.
The wound that we got as a country is so deep that it needs time to heal and no amount of immediate pain relief can be sufficient. But, from the entire banking fraternity I would like to convey one message to each and every citizen of our country, that, kindly bear with us in this tough hour and support us to repay the faith that you repose and have invested in us.
Happy Banking 🙂
Casual Thoughts 