Public Sector Banks

Chidambaram asked PSBs to review their decisions and take prior permission from the government, being the majority shareholder. And not surprisingly, one of the leading PSBs (Oriental Bank of Commerce) did revert back to earlier rates. This ridiculous and illogical act of the ministry has not only put a question mark on the entire concept of deregulation of interest rates, but it could also be taken as a precursor to serious banking troubles, adversely affecting the already worsened situation of banks. A recent example of RBI’s debilitating stance is the refusal to allow a few banks of Singapore to expand their operations in India, even after signing the Comprehensive Economic Cooperation Agreement with Singapore.

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Source:- IIPM-B&E , Initiative:- Prof. Arindam Chaudhuri - 2006