Just two things can fix public sector banks’ problems8 min read 19 Mar 2018, 12:52 AM IST
If public sector bank officers are allowed to perform without fear or favour by their proximate bosses, the bulk of the problem is solved
Sometime in late 2017, billionaire diamantaire Nirav Modi walked into the office of the chief executive officer (CEO) and managing director of a large Indian private bank in Mumbai with two of the bank’s directors in tow. The meeting did not last long. No, Modi—who has drilled a big hole in the balance sheet of India’s second largest government-owned bank, Punjab National Bank—was not looking for fresh funds for any of his companies. He was exploring ways to replace part of his existing bank loans with a fresh facility to bring down the cost of funds. The private banker did not oblige him. After Modi left his room, the CEO told the two directors not to arrange another meeting with Modi, if they really cared for their board seats.