Public sector banks (PSBs) no longer have the luxury of default fallback on the government for capital, cautioned State Bank of India Chairman Arundhati Bhattacharya.
The SBI chief observed that the government for very long has been the main provider of capital to the PSBs.
“There is a saying in Bengali that says ‘lagey taka, debey Gouri Sen’ (it means if you need money, Gouri Sen will lend it to you). Gouri Sen was one of the biggest money lenders to the East India Co. Now, it is like that with the PSBs.
“You (PSB) need money, government will give. But I think, you know, we have got to get out of that. That is not the case any more at all. The government is very clear. They will give money only if you are actually efficient in all that you do,” said Bhattacharya at a CII meet.
The SBI chief underscored that if PSBs are looking for capital and if they have to access the global pools, the one thing that global investors always talk about is the bank’s board governance and the ability of the board to lay out the strategies and give it the proper guidance to ensure that it has a sustainable future.
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