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Headlines

Abhijit Banerjee for bringing govt stake in PSBs below 51%

New Delhi, Oct 22


Nobel laureate Abhijit Banerjee on Tuesday called for reducing the government equity in public sector banks to below 51 per cent to remove the fear psychosis among bankers.

Addressing a press conference here, Banerjee said that fear of investigation by the Central Vigilance Commission (CVC) in default cases has paralysed the banking system and bankers are scared to lend.

Reducing the government equity in public sector banks under 51 per cent takes them out of the CVC's purview.

Refusing to take questions on the economy and any contentious issues, Banerjee attempted to dispel the impression that he is a critic of the Narendra Modi government.

He said that in his meeting with Prime Minister Narendra Modi earlier in the day, the Prime Minister jokingly said the media was trying to trap him to say anti-Modi things.

Some statements made by the Nobel laureate regarding the economic slowdown and his prior association with the Nyay scheme of the Congress have been blurred to brand him a critic of the Modi government.

After his meeting with PM Modi, Banerjee, referring to Modi's joke, said the Prime Minister has been watching television. He said the meeting was cordial.

Before the press conference, the organizers had appealed that questions on political or contentious questions should not be asked and instead the focus should be poverty alleviation.

Asked about the crisis in the banking system, Banerjee said it is "frightening". He said such crises are happening repeatedly and if there is a problem in bank balance sheets, then it should be stopped way ahead before it explodes.

On the measure for the banking sector, he added that the government should reduce its equity share in PSU banks to below 51 per cent so that there is no oversight by the CVC.

The fear of a CVC probe, he said, in case of loan defaults has paralysed bankers and the banking system and this power should be taken away.

There are enough checks and balances in the banking system and the CVC has been very heavy-handed in its approach, he added.

During his talks with the government and Niti Aayog, Banerjee has talked about the training of informal health professionals who do not have medical degrees but are providing health services. There are 15 lakh such professionals in rural areas, also referred to as quacks, but Banerjee said either their existence is denied or they are acknowledged and trained properly to boost the healthcare system.

The National Medical Commission 2019 envisages creation of a cadre of health workers called community healthcare workers (CHW) who are not doctors but with training can extend their skills to reach difficult to access areas.