Letters to the editor
A foreign hand
This is regarding the news story "China to gain most from GMR's Male woes" (FE, December 8). As GMR Infrastructure has said, a foreign hand cannot be ruled out. Wherever and whenever we face some problem, China takes advantage. Earlier it was through Sri Lanka and now the Maldives. Could it be a failure of our diplomacy? We have to be more careful and build up our defence in the Navy, Army and Air Force. Only our strength can bring neighbours closer.
Merge weak PSU banks
While there is already a huge budgetary deficit, the central government has still decided to divert huge amount—of R15,000 crore—for capital infusion to 3 weak PSU banks to improve their capital adequacy ratios (CAR) as per the Basel norms, instead of adopting prudent steps of merging weak state-run banks with strong PSU banks with better CARs.
Our finance minister P Chidambaram, in his earlier stint as FM, was very keen on the merger of PSU banks and creating big banks which would be strong enough to compete with foreign banking giants. But now, after taking over from Pranab Mukerjee for a second stint as FM, Chidambaram is surprisingly not at all broaching this subject.
Some of the weak PSU banks, like Central Bank of India, have too much 'head weight', in the sense that they have too many executive posts unnecessarily created to accommodate politically influential officers and union leaders. So, the merger of PSU banks will trim 50% of such redundant executive posts and enhance banks' efficiency and profitability.
It will also give scope for reducing the number of loss-making-branches by closing the over-lapping branches after the merger, without affecting the inclusive banking policy of the government.