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The central financial institution mentioned it was issuing what it described as a “clarification” in response to “media studies stating RBI was in opposition to the privatisation of public sector financial institution (PSBs).”
A analysis paper, titled ‘Privatisation of Public Sector Banks: An Different Perspective’ and authored by RBI’s banking analysis division, had argued in opposition to big-bang privatisation of PSBs, calling for a extra nuanced and calibrated method on proposed authorities stake sale.
‘Researchers Favoured Gradual Method’
“As clearly acknowledged within the article itself, the views expressed within the article are these of the authors and don’t signify the views of the Reserve Financial institution of India,” the regulator mentioned Friday. “The article is authored by researchers of the RBI.”
The contents of the analysis paper was extensively reported, together with in ET, which carried a narrative beneath the headline, “Financial institution Privatisation Must be Gradual, Notes RBI Paper”.
The paper was printed Thursday as a part of the RBI Bulletin. A gradual method to privatisation may assist obtain the broader social goal of economic inclusion, the paper had mentioned, searching for to underscore the position of state-run lenders in taking formal banking to the under-banked. “The researchers are of the view that as an alternative of a big-bang method, a gradual method as introduced by the federal government would lead to higher outcomes,” the central financial institution mentioned as a part of its clarification.
The paper argued that whereas non-public sector lenders are extra environment friendly in revenue maximisation, public sector banks have scored higher at selling monetary inclusion, delivering farm loans and attaining financial transmission-key aims of each the federal government and the RBI. The federal government had introduced plans to privatise two state-owned banks within the FY22 finances.
“Such a gradual method would be sure that large-scale privatisation doesn’t create a void in fulfilling necessary social aims of economic inclusion and financial transmission,” mentioned the paper authored by Snehal S Herwadkar, Sonali Goel and Rishuka Bansal of the RBI’s banking analysis division.
A current coverage paper by former Niti Aayog vice chairman Arvind Panagariya and Poonam Gupta, a member of the financial advisory council to the Prime Minister, had referred to as for the privatisation of all authorities lenders barring the
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