June 8, 2018

Speaking at a press conference in Mumbai

From the Western and Southern region, the morning session pre-lunch was devoted to internal discussions between the bankers on several aspects of Indian banking, particularly, with respect to improving the credit flow while mitigating the risks associated with that, to further strengthen the growing Indian economy and methods how we can achieve global standards for the Indian Banks. The State Bank of India, has over the years, had a very robust mechanism by which faster credit decisions are taken in a very transparent manner, decisions on credit, decisions on resolution of stress.

A presentation was made by the State Bank of India, based on several years of experience and I am given to understand that all the bankers are now wishing to setup such a mechanism which will enable faster resolution of stressed accounts in a very transparent and speedy manner and will put it up to their boards for necessary consideration. There has also been a proposal that some of the banks may consider having Oversight Committees. It could comprise of retired Judges or Vigilance Officials, Regulators and bring in some external expertise to help faster decision making in the Indian banks.

A few thoughts that came out in the discussions revolved around the working of Indian Public Sector Banks in silos, particularly, when it came to multiple bank arrangements that many MSMEs and small and midcap borrowers have, which was discussed by the bankers during the course of the day. And in many cases, good companies also maybe suffering because of this approach for which the banks have decided to come together and start working in a more cohesive manner in taking faster decisions to resolve the credit needs of MSMEs, exporters and other small and medium borrowers so that the wheels of the economy, the growing needs of exporters can be addressed much faster.

There are many accounts which are also facing certain restrictive covenants because of restrictions placed on some banks in lending for which also a process has been devised by the bankers amongst themselves to ensure that credit flow to good borrowers, to good accounts where some of the PCA banks or banks with certain lending restrictions are also a part of the consortium, will also not face any difficulty in meeting their working capital needs.

A committee has been formed under the chairmanship of Mr. Sunil Mehta, non-executive chairman of Punjab National Bank, which over the next two weeks, will come out with their recommendations of a suggestion that was deliberated in great detail amongst the bankers today who believe that it may be worth considering to set up an asset reconstruction company and/or an asset management company for faster resolution of stressed assets, which have multiple banks involved in these accounts and often which get delayed in resolution and cause loss of value to the banking system as a whole.

This group will consider whether such an arrangement will be good for the banking system, and if, any such suggestion is considered advisable they will also consider the modalities by which such an ARC and/or an AMC should be set up.

Several other suggestions came out in the deliberations particularly to strengthen the governance processes in the Indian Public Sector Banks and measures to improve the performance of these banks were discussed amongst the bankers and, subsequently, put up before me which has further strengthened my confidence and the Government of India’s confidence in the future of the Indian Public Sector Banks. The Government of India as the owner of 21 Public Sector Banks stands committed to support each and every one of these banks and the Government of India believes that these banks have a very important role to play in the economic and social development of India.

The government stands committed to give full support to strengthen the operations of the Public Sector Banks and to protect the interest of depositors, customers and all the stakeholders of our 21 Public Sector Banks, including the employees of these banks. We believe the various steps and initiatives taken by the government, by the Reserve Bank of India and by these banks, for a true and fair picture and honest recognition of the state of affairs of these banks, of an honest appraisal of the asset quality of these banks which has been fast tracked over the last two and a half years is strengthening these banks to be able to meet the ever growing needs of the common man of micro, small and medium-sized businesses and also ensuring that these banks are able to lend in a fair and transparent manner and at lower cost of credit to the borrowers of this country.

Will believe that the honest recognition of these non-performing assets and the resolution framework under the Insolvency and Bankruptcy Code, which the Government of India and the Reserve Bank of India have initiated in India, reflecting the true position of these banks and also bringing to light, large amounts of indiscriminate lending particularly during the 2008 to 2014 period, a lot of which is today under some stress or the other in different forms will help strengthen these banks to be able to serve the people of India and the Government of India will give every necessary support to ensure the success of this resolution process, both in terms of governance reforms and in terms of better management of the balance sheets of these banks.

On a personal note, I found that the efforts that the public sector bank managements presented before me truly encourage my own commitment personally and the commitment of the Government of India to support these efforts and I am very confident that together the bankers, the Government of India and the Reserve Bank of India will be able to get these banks into good shape and once again become the engine of growth for the Indian economy. I would like to thank State Bank of India, all the other bankers and the officials who have joined me in this effort to understand the problems of these banks, to appreciate the very good suggestions and solutions that the bankers themselves put before us and I would like to express my full support and the support of the Government of India in these efforts that these banks have committed themselves to.

Thank You




Q: I am Ritu Singh from CNBC TV18, Mr Goyal. My question was about your proposal to set up the AMC or the ARC in either way. I suppose before you even begin, you know, the Mehta Committee begins to probe the possibility of such a ARC or AMC, what will be the source of funds to support this? And when you say that the government stands committed to support these 21 Public Sector Banks, are you proposing that the government could also perhaps participate in terms of, you know, fund infusion into these proposed ARC or AMC?

A: Well I think it’s too early to go to that level. We’ll have to wait till the Committee has discussed with all the Bankers and come up with their recommendation whether we should look at this as an option and what should be the structure or modalities of this proposal. Let us wait for their recommendations and then will take an appropriate call at the right time. NIIF could be a possibility that this Committee may consider. They can discuss with the NIIF as we have mentioned earlier the NIIF is completely independent and autonomous body. And the Government of India does not either interfere in its working or in its investment decisions.


Q: Mr Goyal, this is Manujit Saha from The Hindu. You started your comment by saying one of the things discussed to increase the credit flow. Now, the amount of capital the government which will give the banks this year about Rs. 65,000 crore is adequate for the regulatory capital, for the provisioning but not sufficient for growth. That is what Moody’s, rating agency Moody’s, said yesterday. My question is, is the government considering to increase capital allocation in public sector banks in the current financial year?

A: I think it’s a little early to jump the gun to that point of view. We have just had a monetary policy yesterday. I think all the banks will have to look at their balance sheets. We’ll have to see what is the extent of money that they will be receiving from shedding off their non-core assets which process is already underway. The Sunil Mehta Committee will also come out with their recommendations on the AMC/ARC, which will also help the banks to trim their balance sheets and shed some of the overhang which has troubled these banks.

Similarly, we’ll have to see the impact of resolution of cases under the IBC which is now seeing very good success. Once all of this is on the table, we will have the Indian Banks Association, the IBA whose Executive Director is here with us, work with all the bankers and come out with what really is the need of each of these banks and an appropriate decision at any point of time required will be taken. I would like to reiterate that the government of India stands solidly behind each and every one of these 21 banks. We want them all to come out of their stress and we want all of the banks to be growing to meet the needs of MSMEs, to meet the needs of the economy which is rapidly growing. You have seen the numbers last quarter, 7.7% growth. The monsoon is showing very good signs. I have had the pleasure of enjoying the monsoon in Mumbai after many years yesterday. I was expecting it to pour today but it looks like the Municipal Commissioner said tomorrow there will be a heavy rain. So, I think good monsoons coupled with a robust growing economy, coupled with the confidence that I saw in the bankers today, we have a great year ahead of us.


Q: Mr Goyal, Vishwanath here from Bloomberg Quint. Just wanted to understand, already there are about 5 Public Sector Banks without Heads, 5 Public Sector Banks who do not have a leader. There is also going to be some positions falling vacant later part of this year. At a juncture where there are some, you know, you were talking about a turnout in this sector. Without leadership, how can it be done?

A: In the next 30 days, we are making an effort to completely man all the vacant positions at Executive level in all of these banks. That was one of the issues discussed today. I am personally aware that the Banking Secretary has literally had two sleepless nights preparing the background material for the Bank Board Bureau to start its work and we will take quick decisions in the next 30 days.


प्रश्न : अनुराग ज़ी बिज़नेस से| सर जैसा कि अभी आपने बताया कि जो बैंक पीसीए में गए हैं और जिसके ऊपर restrictions लगा दिए गए लोन बांटने को लेकर और उससे काफी दिक्कत आ रही है क्योंकि कई-कई केसिस ऐसे हैं जहां पर लोन सैंक्शन हो चुका है लेकिन डिस्बर्स नहीं हुआ या फिर कई इन्सटॉलमेंट दे दी गई हैं  और कुछ बाकी रह गई हैं, ऐसे कई प्रोजेक्ट्स भी फसे हुए हैं| तो उन केसिस में आपने बताया कि जैसे कंसोर्टियम के जरिए लोन दिया जाएगा या फिर आप रिजर्व बैंक से गुजारिश करेंगे कि कुछ रियायत दे क्योंकि कई सारे ऐसे केसिस हैं जहां पर लास्ट लेग में जो पेमेंट है वह फस गया और वह गुड borrowers भी हैं|

उत्तर: इसके विषय में भी काफी विस्तार से चर्चा हुई श्री जयकुमार जो बैंक ऑफ बरोड़ा के मैनेजिंग डायरेक्टर हैं यह और बाकी कुछ बैंकर्स मिलकर इस विषय में कुछ एक व्यापक सोच के साथ तरीका निकालेंगे जिसमें जिन बैंकों का, को कुछ कठिनाइयां है कंसोर्टियम लेंडिंग में या कुछ उनके ऊपर पाबंदियां लाई गई हैं उनका शेयर कैसे बाकी बैंक्स मिलकर टेक अप कर सके अच्छे अकाउंट में, जिससे कोई अच्छे अकाउंट को पर्याप्त ऋण की सुविधा समय पर तरीके से मिलने में तकलीफ नहीं हो|


Secretary: Thank you, thank you very much sir. I think the approach would be that the banks who have the capital and the liquidity to lend will step up to take their share. The issue is around how to operationally make it happen seamlessly, how to ensure the boards would support such proposals. Those details we’ll kind of work it out but in a consortium where funding, additional funding is required for the legitimate growth of the business, the banks if some of the banks are not willing to participate, the banks which can and have the liquidity will step up and participate. That would become a seamless a working mechanism and we need to put arrangements to make that happen. We will do that in a very short order of time.

उत्तर: सभी बैंकर्स ने इसको प्राथमिकता दी है कि जो अकाउंट अच्छा है जिसकी जरूरतें निर्धारित हो चुकी हैं या सैंक्शन हो चुकी हैं या जिसकी जरूरत जेन्युइन है किसी को भी समय पर क्रेडिट मिलने में तकलीफ नहीं हो| इसके बारे में विस्तार से आज सुबह इन्होंने चर्चा की और मेरे समक्ष अपने निर्णय को रखा|


Q: Good evening, Amrita from BTVi, just a follow up on the AMC or ARC. Is the thinking that it will be something along the lines of what was the……… earlier and any quantum that we are talking about in terms of covering the bad debt in the system? And also, was there any discussion about, this was a follow up. Was there any discussion on power loans because there has been a lot of concern over there, any restructuring package that is in the talks discussed with the banks or the Samadhan Scheme?

Secretary: You know you have, I think you have answered your question. In many ways, the first basic thing is that there is a need for us to look at it and the potential is obviously there. We have to work out the modalities as to what is feasible and what is not feasible. You spoke about capital, I think there will be as long as it is in the need, capital will be available there. And I think, you know obviously, there is a lot of stressed assets that have been, sort of, identified that could possibly fit into this AMC or ARC structure whether it is power or it is some other sectors. We’ll look at it depending on what the need is and what the interest is and I am quite sure that in a couple of weeks from now, hopefully we’ll have a better structure to report back to the government and to the media in terms of what are the contours that are being proposed for review by the government.


Secretary: So, power sector, of course, specifically we did not discuss today but the structure which is being proposed and which is the Committee has been constituted under chairmanship of Mr Mehta. So, if it is a stressed asset in any sector, that will be open for this ARC if it takes……

A: Incidentally, the Allahabad High Court has given certain directions. We’ll be discussing with the Power Ministry and the Finance Ministry jointly to consider the directions of the Allahabad High Court and will in a very expeditious manner, look at resolving the stress in those eleven plants which the Allahabad High Court has asked the Finance Ministry to spearhead. I believe there is good value in those plants. There is a good need to get some of those plants going quickly in a fair manner so that the bankers who have lent to those banks do not have to face too much stress as well as we can get those plants into operation to support the ever growing needs of the Indian economy.

One important factor that’s also linked to that and as a former Power Minister, I can tell you there are a number of plants in India which have outlived their life. There are plants which are more than 25 years old and as Power Minister, I had stopped the RNM of any old plant. The idea being the old plant should gradually phase out and modern new plants which don’t pollute the environment so much should be encouraged. So, I think it also fits in very well with the agenda of this government to support less polluting thermal capacity and phase out the old plants coupled with that is another advantage that many of these plants are near the pithead of the coal mines. So, it will also reduce the burden of long distance transportation of coal. So there are lot of benefits that are available. We have started the efficient utilization of coal through tolling. Gujarat, Maharashtra have already started tolling using their coal at some of the pithead plants. So, there are various ways in which they can efficiently serve the nation and the needs of the people of India.


Q: Good evening sir. My name is Saurabh from NDTV. What I would like to ask you is that while you are making all these efforts to sort of increase credit flow. The RBI’s Consumers Confidence Survey shows that roughly 48% of households polled say that the economic situation for the current period has worsened. In all of this, how do you plan to address issues like that?

A: Well, I think the facts speak for themselves. We have had 7.7% growth. Some people I don’t know whether it’s because of blinkers or whatever have come up with a report which does not seem to gel with the reality. Then, I have no answer to them but there will always be some naysayers in this world. I hope your channel is not one of those naysayers.


Q: Good Evening Mr Goyal. This is Ashwin Mohan here from ET Now. You spoke about the fact that during the course of the meeting today there was a lot of enthusiasm and optimism amongst the top PSU chiefs over here. I am just curious to know whether there was any enthusiasm or optimism regarding the proposal or the potential for mergers between state run banks or is that a proposal which is now on the back burner? And allow me to slip in a second question please, Mr Goyal! If you look at the entire IBC, the Insolvency and Bankruptcy Code, you spoke about the fact that Stressed Asset Resolution was one of the main pillars on which this meeting was called upon but in the past, we have seen two issues – maximization of value and entertainment of late bids by lenders. That has caused the maximum litigation and there are many cases that are still unresolved. We expected the IBC Ordinance to give us some clarity on that but the Ordinance fine print is silent on that and now I am given to understand that it’s been handed over to the Insolvency and Bankruptcy Code of India. What was your advice to the bankers today regarding maximization of value and the controversy around it and also entertaining of late bids? Those are the two questions. Thank you!

A: Let Mr Rajneesh Kumar answer and then I’ll supplement it.


Secretary: Right! So, one of the topics for discussion was also that achieving global standards in scale for Indian banks and what is the way forward. So there, we have made a presentation to other banks and the presentation was about that currently the scenario is that there is a fragmentation as far as the banks are concerned and if we compare globally, the size of the banks in India is still relatively small. And, otherwise, if you look at all the indicators of the Indian economy, digitization, demographics, so they are very positive. And if India is to continue with the growth story, the banks also need scale.

Here, we also shared our own experience where earlier, we took 5 years to merge two banks, one by one, but this time, we have merged five banks in one go and Bhartiya Mahila Bank. And after initial four-five months which were used in putting all the house in order, sorting out all the issues but after 6 months of merger, we have started seeing the benefits of that merger. The convenience, the global reach which we have given to the customers of those banks the superior technology which the State Bank had, the need for State Bank we are like because we had majority ownership and then we have to provide and infuse capital periodically. We could rationalize lot of branches. Our savings are in excess of Rs. 1,000 crore. So there are many, many benefits which State Bank has actually is now reaping and will be visible. So, last one year, I would say six months was a little bit of pain in a merger of this scale where five or six banks in one go, I don’t think that in the world anywhere such an example exists. But there are certain benefits of scale and that is something which banks would definitely like to deliberate and discuss and the benefits of scale are visible to all. So, I think such a fragmented banking system is unable to support, currently the growth aspirations of the country.


A: Two things, first of all I want to clarify today’s meeting was not about stressed accounts. If I may read out, the meeting was on improving credit flow to the system in a risk mitigated manner and achieving global standards for Indian Banking System in terms of governance, in terms of banking processes, policies. So, obviously, stress is one of those aspects which was also covered. As far as what Mr Rajneesh said, I believe the State Bank made the presentation, all other bankers had discussion and they mentioned it to me when I came in also but the Government of India believes that autonomy of the bank should be recognized and that is the one big difference that the Modi government has brought to Indian banking.


In the last 4 years, very much different from the practices prevailing before 2014, the Government of India has not directed what banks have to do. We have not micromanaged banks. We have not micromanaged credit flow. We have not been interfering in bank managements on any one of the operational aspects and that is that autonomy which has actually helped these bankers to start taking bold decisions, including recognition of the stress which for so many years was being pushed under the carpet or ever-greened by restructuring and fresh loans. I think, I asked all the bankers individually also and one clear message I got was that they have not had a single instance of interference by the Government of India for the first time in four years and all of these are experienced bankers having spent 30 years plus in the Indian Banking system.


As regards the NCLT process, again the Government of India has kept a completely hands off approach in the NCLT process. We believe it is for the lenders and the Courts and the NCLT to resolve all these questions whether relating to late bids, whether accepting bids from a particular party or no. The Government of India has absolutely no role to play and shall not interfere in these matters. We have created a very robust framework as law. We have amended that robust framework to make it even more robust and to support particularly the micro, small and medium enterprises, the MSMEs and therein ends our responsibility. Should any clarifications be required to further clarify or improve that framework, the Government of India will consider it and it’ll come out in from time to time. But interpretation of the framework and the law is for the NCLT, the Appellate Authority and for the Courts to decide and the operationalizing of the process is for the bankers to do.


Q: Sir, Sangeeta here from Economic Times. Sir your government is obvious maintained that it’s more of governance and less of government and you have always maintained that we treat private banks, public sector at par that there is a fair play between them, but the recent issue where government has maintained absolute silence on ICICI Bank governance issue and the government normally has not even attended the Board meeting and nobody from government has even made a statement where, you know, there is a lot of concern because this is a second largest bank and the largest private bank. Could you give your sense on to what extent you know because …..

A: I think ICICI Bank is a good bank. It is absolutely, it has very robust processes and there is no cause for concern for any of the stakeholders of ICICI Bank per se. As far as the law is concerned, the law of the land will take its own course and the processes are already going on both internally in ICICI and externally which will finally come out with their findings.


Q: Sir the question is why is government not attending the board meeting?

A: I wouldn’t know about that particular meeting, but I will find it out.


Q: Abhijeet from Business Standard. You left his question on consolidation unanswered. He asked about there has been a lot much of news appearing in the papers over the consolidation among the Public Sector Banks. Is it a right time and how exactly you look at it?

A: First of all don’t believe everything you read in your own papers also. In fact very often, I find some reports coming out at a particular point of time which almost seem to be prompted when I look at the timing of those reports and most of them are based on unnamed sources which I would urge the people of India not to believe, unless it is an official communication from the government or from a named source. Because very often, these unnamed sources are completely baseless, false and I don’t know whether they are motivated. So, please don’t believe the reports that you may read, howsoever big the journal or the agency may be, Point 1.


Point 2, as regards the question you reiterated that it’s unanswered as Mr Rajneesh Kumar said, State Bank, I believe shared their experiences in the morning with amongst the bankers and there was discussion amongst the bankers about it. The Government of India is not going to micromanage what the bankers should do. We have again and again held the view that we believe in autonomy of the banks and the banks will have to take the final call if at all they have to or they wish to. As Rajneesh Ji said he made a presentation and which is why, I didn’t participate in the morning session and it was left for the bankers to deliberate amongst themselves what is good for the Indian Banking system.


Q: Hi Sir, Bijoy from Cogenesis. If you could just throw some light on whether there were any discussions on the bond markets and the fact that many PSU banks have because of prompt corrective action and the other reasons not been very active in that market. Also just to add to it, I believe there were some meetings also in the Finance Ministry with some foreign banks about the same issue. If you could just speak about it?

A: Well, I don’t know whether there have been any meetings in the Finance Ministry, but I am happy to share with you that I have had informal meetings with economists and various stakeholders of the banking system or the credit system, which I like to do all the time. It’s not something that is new to me. Many of you who know me know that I like to keep consulting experts in different fields and trying to educate myself to understand the intricacies of different systems, but whether the PSU banks should participate in the bond market or in issuances and all is left to the banks to decide. Government has no role or guidance in the matter.


प्रश्न : पीयूष जी मेरा नाम सुभाष शिर्के है, मैं न्यूज़ नेशन न्यूज़ चैनल से हूं| जो 40 बड़े डिफॉल्टर एकाउंट्स आइडेंटिफाई किए रिजर्व बैंक ने, उसमें 6 लाख करोड़ अटका हुआ है बैंकों का| आप खुद चार्टर्ड अकाउंटेंट है, कितना पैसा रिकवर होगा आपको लगता है?

उत्तर: यह मुझे लगता है जो व्यवस्था 2014 के पहले इन सब लोन्स को देने में जिसका शायद हाथ रहा होगा यह प्रश्न शायद वही जवाब दे पाएंगे क्योंकि हमारे समय में तो कोई लोन दिया हुआ ऐसा कोई NPA या स्ट्रेस में नहीं आया है|


Q: Sir this is Surbhi from The Hindu Business Line. Sir, was there any discussion on the February 12th Circular of the RBI, because there has been concern by banks and the Finance ministry we well I believe in it.

A: That was not a subject of today’s discussion. Today as I said, we were looking at the bigger picture, not every specific issue or direction.


Q: Sir this is Gopika from Mint newspaper. With regards to the ARC/AMC model, we already have a structure called RSIL. So, is there a need for creating another structure? Is the Committee going to look into it because again you are going to pump in capital equity into this new structure? So, is there a need for the banking system to have another form of ARC?

A: I don’t know, my guess is as good as your guess. Let’s wait for the Sunil Mehta Committee to consider all these aspects and come out, as I said in my opening comments, the need for it and if there is a need for it, the modalities of it both are the terms of reference of Mr Sunil Mehta’s Committee.


Q: Manju from DNA newspaper. You said most of the NPAs that you see now is due to the loans that were given out in 2008. Now you have 5 years in government, what stopped the present government from resolving some of these stressed assets, especially if you look at the NPAs, many of the NPAs, a good portion of it is from stalled projects. So what’s stopping this government from, you know, resolving it or supporting the government from doing so?

A: First of all, we seriously believe that it is not the government which will resolve these problems. It will have to be by the bankers and by the stakeholders or the borrowers themselves – Point 1. Point 2, as of now, none of the projects is stalled because of government inaction. In the old days, you used to have an environmental clearances, for example, getting delayed for longer periods. This government has already streamlined that process and the time taken for environmental clearances has drastically fallen, probably to one-third or one-fourth of the earlier times.


In terms of allocation of coal to power plants, we have come out with Shakti Policy which has ensured that every power plant which is ready and which has a power purchase agreement will be eligible to get coal in a transparent manner. So, every one of the issues which the government could resolve, we have been hands-on on top of it. The Prime Minister himself takes PRAGATI and through video conferences, interacts with state governments and their officials and the Ministries to see what can be done to resolve pendencies at the government level. But if promoters don’t have equity capital, for instance, that’s not something that the government or any banker can resolve. If there have been cases where there has been fraud or willful defaulters, it’s not something that the government is going to be involved to bailout.


Q: Sir Shayan Ghosh from the Financial Express. Two questions Sir, one is, could you throw some light on the oversight Committee and would it be over and above what the RBI already has. And when you speak over the consolidation, follow up on that question, you said the government wouldn’t interfere. Would it, you know, does it mean that the banks get to decide who they merge with and the government will not decide at all as to what happens, if that’s the case?

Secretary: So about this it’s not an oversight Committee. In fact, it is a screening Committee and, particularly, it is review of those cases where we are entering into any OTS, one time settlement or sale to ARC. So, it is about to ensure that there is a view from outside experts that the process which bank has followed that is proper, the valuations are proper, the value which bank is intending to realize that is proper and this screening Committee will comprise of eminent personalities – either retired judges or retired senior bankers or retired CVC officials. So, that will give lot of comfort to the bank managements and the Boards also when these issues come up for discussion that not only the executives of the bank have seen that process and have arrived at a decision but that has been looked into by the experts also. So, that is the whole purpose of this screening Committee.

Secretary: Could I just make a comment on consolidation, just one thing. I just thought I would chip in and make a couple of comments on consolidation because that’s come up again. I think the point is that there are few points to make – one that scale is required in inorganic growth is also a sensible strategy many times, that’s number 1.


Number 2 – the objective of this exercise is not to make a strong bank weak or bailout a weak bank. It is about synergies and benefits and overlapping geographies and those kinds of stuff. See, whatever the processes are to be done has to be thoughtfully done particularly in relation to capital and subsequent funding and, finally, it’s something that must work for all the stakeholders in place. So it’s a thoughtful process, it’s kind of natural process to go forward but there is no need to conclude as many times have done this is all about bailout of somebody and then there is some other good banks bank that’s going down the drain. It’s not so, it’s actually intended to strengthen both these institutions in the process. That’s really what I want to emphasize.


Q: Mr Goyal Sir, good evening Vijay Iyer from ET Now. Sir, as you are rightly pointing out in the last 4 years, we see the whole objective has been to bring in transparency, bring in accountability across the banking sector. If you could just throw some light when it comes to the Banking Board Bureau, has the desired objective been achieved or we need to do more, because the whole emphasis somewhere was to get the best corporate governance practice, to see how things could be streamlined when it comes to accountability and transparency in the PSU banks. Has the desired objective been achieved. And sir, just quickly to add in the same context sir, particularly, once again if I could refer you said in ICICI bank, law will take its own course but somewhere the perception is that so many things are happening across private sector, PSU banks. RBI has not been very forthcoming or not seeing RBI taking any tough chance particularly in the case of ICICI bank maybe market regulator stepped in adjudication process, not a single statement coming in from RBI as a banking regulator. How do you see this situation?

A: Well as regards the first question on the BBB, it was a new experiment. It was initiated to bring transparency in the appointment process in the banks which earlier was, very often, having allegations of various sorts of favoritism or a non-transparent, opaque methodology, lot of pulls and pressures. I think the BBB has done an outstanding job in putting an end to all of that. We have brought in great amount of transparency. We have brought in merit as the single most important criteria in the appointment of senior people, senior management in the banks.

Obviously, when a question is asked whether they could do more, Yeh Dil Maange More, it’s for everything you can do more. I am sure the ET Now management believes the editorial could do better in the days to come and will always expect more and more from each one of you in this room in your own world, just as my Prime Minister expects me to perform even better every single day. So I think that evolution and continuous improvement is a process and that process is going on very, very smoothly. As regards, the Reserve Bank of India, I think you have asked that question of the government. If at all you have any question you should put it up to the Reserve Bank of India.


Secretary: I think you spoke about the role of the BBB. I would just like to add that there is an active engagement. We formed a group of the non-executive chairman of the Public Sector Banks. It’s called PCF, PSP Chairman’s Forum where we actively now engage with the BBB as a group in terms of all the governance issues that sort of we also believe that needs to be looked into and I just want to say this that the kind of openness which is there for them to sort of a) Understand the issues and to talk about board empowerment and see how we can have more of that, the leadership empowerment about making sure that the management is sort of adequately equipped. So, there is a lot of openness that is there with the BBB in terms of making sure that as we equip the banks and sort of get the right governance structures in place for them, to sort, of have a more efficient growth from here. So, I think that’s one of the other elements that I thought I share with you.


Q: Sir Beena from Money Control. Who is part of the Committee under Mr Mehta and by when can we expect the details to come out for the ARC and, secondly, would you have a view on the governance issues of the banks which is, you know, having the light of the day right now and we are not hearing anything from the RBI or from the CEO herself. So, would government have a view at all on this, on the governance issues that the private sector banks because we have seen an action taken for Allahabad Bank CEO, but the same has not been happening at the private sector banks?

A: The supervision of banks is being done by the Reserve Bank, so you can direct the question to them. But I believe that the government has given complete autonomy to both private and public sector banks to run their operations in a fair, efficient, transparent and honest manner. To my mind, the Government of India believes that Indian banking is an important pillar of the economic growth in the country. We are always there to help strengthen the Indian Banking system. We stand committed to each and every one of the banks in India, and more particularly, to our 21 Public Sector banks as owners of these banks. So, when it comes to ensuring the success and ensuring robust, good governance practices in our 21 public sector banks, we still have a more active engagement. I am sure the Boards of these banks or of the other banks, private sector banks, are taking necessary action wherever required and the rest is for the Reserve Bank of India as the supervising authority to act if it all, whatever has to be done.

Thank You

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