GVR moots bank privatisation

NEW DELHI, AUG 26: Disinvestment Commission chairman G V Ramakrishna has said that all banks except the State Bank of India should be privatised with government shareholding limited to 26 per cent. He said that reform in the banking sector should lead to the merger of weak banks, recapitalisation and thereafter privatisation.

Delivering the sixth Lovraj Kumar memorial lecture on the unfinished agenda for reforms, Ramakrishna said privatisation would not affect priority lending as it could be enforced through proper legislations. quot;Lending norms should be prescribed for the private banks by the government.quot;

Ramakrishna also underlined the need for the RBI to enforce suitable regulations for the proper growth of NBFCs and to protect the interests of investors as a number of investors had suffered huge losses owing to their uncontrolled and nefarious activities of NBFCs.

The chairman also said the government shareholding in financial institutions should be reduced to below 51 per cent and the remainingshares should be entrusted to a trust company.