Need to be patient

That the Banks Board Bureau (BBB) has not been able to make perceptible improvements in the functioning of public sector banks (PSB) has been correctly pointed out in the editorial, “A half-hearted attempt” (September 6).

Despite the well documented failures of the BBB, the idea of having it was sound. It originated from the committee headed by no-nonsense banker P J Nayak and was to be the harbinger of a series of bank reforms culminating in the complete segregation of bank boards from the owners — the central government — through the mechanism of a holding company. In this sense, the BBB was a reform in itself as well as a pulpit for things to come in state-owned banks.

With the change of guard at the Department of Financial Services and the joining of a new banking secretary, the government will have an opportunity to take a fresh look at the obstacles facing the BBB and to kick-start the reform process at PSBs. As the BBB was an idea of the present government, it would be easy for it to rejuvenate the board and take it ahead.

The reform process at PSBs remains in limbo and there are no ideas, except for the P J Nayak Committee report. The finance minister should now turn his gaze on the issue of banking reforms after completing the task of implementation of the goods and services tax (GST) and shedding the responsibility of the defence ministry.

Patience with the BBB should not run out fast. The hope of banking reforms should be kept alive as these are sine quo non for the Indian economy to improve. Otherwise, the writing is on the wall — in this case, on the board — for everyone to see.