Expressing concern over the alarming trend of the banking sector being dominated by private players, the former Governor of Reserve Bank of India Y.V Reddy said here on Friday that privatisation of the banking sector was not healthy for a developing economy.
Delivering a talk on “Developmental banking,” Mr. Reddy said it was unfortunate that there was no national bank which was 100% owned by the government. Even in private banks, the nationalised banks have share more than 50%.
Stating that growth of economy was inextricably linked to the credit linkage by banks, Mr. Reddy said that India could take a cue out of Japan and Germany where governments draw capital from banks and use it for taking up infrastructural projects.
“Look at China, which is competing with India. There is 100% of developmental banking, while in India, the share of public sector banks is hardly 50 to 55%. There is no public bank which has 100% share,’’ Mr. Reddy said
Vice-Chancellor of Vellore Institute of Technology G. Viswanathan said the rapid proliferation of political parties has bred corruption in the system. He found fault with conducting bypolls which witnessed large scale spending of money.
Jomo Kwame Sundaram, Tun Hussein Onn Chair, Institute for Strategic and International Studies, Malaysia, said the period during 1975-1990 was marked by stark inequalities in the economic development. Ghana, which secured independence long ago, was unable to prosper as it was not unable to address issues of poverty. Providing subsidies in developing countries was also stemming growth, he observed.