Large corporates should not get banking licences in India, says veteran banker Narayanan Vaghul
The 87-year-old, who formerly headed ICICI Bank, said going forward, the private sector banks' play in the financial sector will grow so fast that automatically the heft of public sector banks will keep moving down.
- Jun 10, 2023,
- Updated Jun 10, 2023 5:52 PM IST
Veteran banker Narayanan Vaghul, while speaking to Business Today, said that industrial houses should not get banking licences and the Indian banking system must be run by professionals. He was responding to a question on whether the Reserve Bank of India should hand out more banking licences.
Vaghul also spoke at length about the PSU banks versus private banks debate, the Indian banking system, and much more.
While speaking about the manner in which PSU banks are handled, he said, “In my tenure, I didn’t like the way the government controls PSU banks. The market values private sector banks more than public sector banks.” The way the government manages the PSU banks is depressing.
On how PSU banks can improve operations, Vaghul said that the government should step out of the PSU banks in order to increase its efficiency. He further mentioned that RBI held shares of the State Bank of India for the longest time and therefore it is very important that the government should step out of the banking system to ensure seamless operations of banks.
While talking about the need for more banks, Vaghul said that the size of banking should reflect on the size of the economy. “Indian banking is far ahead in terms of technology and we have to prepare ourselves for banking in 2030.”
He also spoke about gender neutrality in the banking sector. “Gender neutrality is a must for any organisation and we should remove barriers for women.”
The 87-year-old, who formerly headed ICICI Bank, said going forward, the private sector banks' play in the financial sector will grow so fast that automatically the heft of public sector banks will keep moving down.
In April, Union Minister of Finance and Corporate Affairs Nirmala Sitharaman launched ‘Reflections’, a book authored by eminent banker Narayanan Vaghul, in Mumbai. The book carries a vivid account of Vaghul’s experiences spanning decades in India’s financial landscape.
Also Read: Hindenburg-hit Adani Group's proposed Air Works deal has long passed its stop date: Report
Veteran banker Narayanan Vaghul, while speaking to Business Today, said that industrial houses should not get banking licences and the Indian banking system must be run by professionals. He was responding to a question on whether the Reserve Bank of India should hand out more banking licences.
Vaghul also spoke at length about the PSU banks versus private banks debate, the Indian banking system, and much more.
While speaking about the manner in which PSU banks are handled, he said, “In my tenure, I didn’t like the way the government controls PSU banks. The market values private sector banks more than public sector banks.” The way the government manages the PSU banks is depressing.
On how PSU banks can improve operations, Vaghul said that the government should step out of the PSU banks in order to increase its efficiency. He further mentioned that RBI held shares of the State Bank of India for the longest time and therefore it is very important that the government should step out of the banking system to ensure seamless operations of banks.
While talking about the need for more banks, Vaghul said that the size of banking should reflect on the size of the economy. “Indian banking is far ahead in terms of technology and we have to prepare ourselves for banking in 2030.”
He also spoke about gender neutrality in the banking sector. “Gender neutrality is a must for any organisation and we should remove barriers for women.”
The 87-year-old, who formerly headed ICICI Bank, said going forward, the private sector banks' play in the financial sector will grow so fast that automatically the heft of public sector banks will keep moving down.
In April, Union Minister of Finance and Corporate Affairs Nirmala Sitharaman launched ‘Reflections’, a book authored by eminent banker Narayanan Vaghul, in Mumbai. The book carries a vivid account of Vaghul’s experiences spanning decades in India’s financial landscape.
Also Read: Hindenburg-hit Adani Group's proposed Air Works deal has long passed its stop date: Report