Govt solidly behind public sector banks: FM

Govt solidly behind public sector banks: FM

Union Finance Minister, Piyush Goyal and Chairman of State Bank of India, Rajnish Kumar, during a press conference organised by State Bank of India, in Mumbai on Friday. PTI

Stating that public sector banks play an important role in economic and social development, Finance Minister Piyush Goyal on Friday reiterated the government’s support to them and formed a committee to examine the setting up of an Asset Reconstruction Company (ARC) and/or Asset Management Company (AMC) .

“The government is the owner of 21 PSBs. We stand committed to support each and every bank. The government stands solidly behind each of them,” Goyal told a press conference, after presiding over a meeting of PSBs based out of Western and Southern regions to resolve various issues concerning them.

At the meeting, which was hosted by SBI, a committee headed by Punjab National Bank Non-Executive Chairman Sunil Mehta was set up that would examine whether banks needed to set up an ARC for faster resolution of stressed lenders. “The broader contours would be decided in a day or two,” Mehta added.

The committee would give a report in two weeks over setting up of ARC and/or AMC to resolve stressed assets of PSBs.

Goyal, however, made it clear that the government is not going to “micromanage” these banks. “We want to see that the banks are not stressed. We want to strengthen operations. We have to look into the depositors, customers, stakeholders and employees,” he said.

Asked whether the government will promote merger of PSBs, he said that the banks themselves would have to look into it.

In the meeting, SBI Chairman Rajnish Kumar and his team gave a presentation.

Goyal further stated that this committee will consider whether such an arrangement will be good for the banking system. If it is considered advisable, the Committee will also consider the modalities by which such an ARC/AMC should be set up.