Rajan hails govt announcement on functional freedom for banks

Rajan hails govt announcement on functional freedom for banks

Rajan hails govt announcement on functional freedom for banks

Reserve Bank Governor Raghuram Rajan today hailed the government direction to state-run banks to act without fear or favour and ignore extraneous considerations in their commercial operations.

It was a landmark decision, Rajan said, speaking to students of the RBI-promoted Indira Gandhi Institute of Development Research during the convocation ceremony.

Prime Minister Narendra Modi had earlier this week pledged not to interfere in the functioning of public sector banks. At the concluding session of the two-day bankers' meet 'Gyan Sangam' to chalk out banking reforms, he had also called for ending "lazy banking" and said banks must prioritise lending to employment-generating sectors.

Subsequently, the Finance Ministry acted on Prime Minister's promise by issuing a direction to public sector banks to act without fear or favour and to ignore extraneous considerations in commercial decisions.

Finance Minister Arun Jaitley, who was the chief guest at the convocation, congratulated the institute for "the gender disparity" in favour of the women. Over 70 per cent of the students who passed out today were women.

Jaitley said the general elections in the past have proved that caste and communal considerations are not what the voters in general and the youth in particular are looking for as they seek better governance and economic growth.

Calling on the students to avail of every occasion to give back to the country instead of being only lured by money, Rajan said they should learn from the institution-builders such as the late Varghese Kurian who built Amul from scratch, and former chief election commissioner T N Seshan and former CAG Vinod Rai.

Earlier in the day, Jaitley met the top management of the nation's largest financial institution LIC at its headquarters here. He was accompanied by the Financial Services Secretary Hasmukh Adhia.

A statement from LIC quoted Jaitley as saying that he had faith in the LIC's ability to grow despite the competition.

Jaitley also said that the corporation was virtually a monolith and the country depended on it on a very large scale. After partnering with the Jan Dhan Yojana, a third of the country would soon be insured by LIC, he said