Banking the people can bank on
The Financial Express Tuesday , April 08, 2008 at 2316 hrs IST
The statistics comparing Indian and US banks in your editorial (‘Cart before the horse’, Apr 4) reveal a post-colonial inferiority complex. Also, despite the Bear Stearns or Northern Rock experiences, you advocate deregulation for the banking sector to “be responsive to the needs of the Economy”. The fear that businessmen, left to their own devices, would sell unsafe drugs or shoddy buildings has been proved to be well-founded time and again. In banking, directed lending serves a valid purpose. The primary sector may not be the most profitable, but to feed millions, it deserves priority credit. With demand-supply mismatches in food production looming large, we also need to provide fresh impetus to farm sector. But “consolidation” by “market needs” is a euphemism for closing less profitable rural branches. The mixed Economy model has served India well.
—Subhashree Kishore, New Delhi