PSB Crisis

Indian government-owned banks saw a reduction of 2,044 branches and about 13,000 employees in 2022 over the previous year, a major bank employees union said in Sunday.

The position they find themselves in is a result of politically induced, management neglected, reckless lending in the last few years

Instead, the unions said, ensuring 'proper governance in the system' and 'removing political interference' will address the problem of NPAs

Department of Financial Services Secretary Rajiv Kumar expressed confidence that PSBs will come out of the PCA this fiscal year

Otherwise, the government would be party to the exceptionalism of Indian PSBs and taxpayers would continue to pay for the lack of due diligence in assessing credit risk in recovering huge unpaid debts

Lingering concerns over asset quality and lack of clarity on a capital infusion plan are seen as the reasons

The government needs a clear vision for the future of India's banking sector, one in which state-owned banks play a smaller role