BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF

'Weak banks must prepare own revival plan'

Union Finance Minister Yashwant Sinha on Sunday re-emphasised that all the three weak public sector banks must prepare their own detailed restructuring programme for proper evaluation and due consideration for the proposed recapitalisation programme by the Reserve Bank of India, or RBI, his ministry for their revival.

Addressing a press conference at the end of his day-long visit to Calcutta, he said it was the responsibility of each of the three weak banks, the Calcutta-based UCO Bank and United Bank Of India, along with the Madras-based Indian Bank, to prepare their own revival scheme.

Only on the basis of such schemes, the final decision on their recapitalisation would be taken, Sinha stated.

On the question of the RBI's recent decision to reduce the savings bank account rate, the finance minister described it as the step in a right direction. Such moderate reduction would now enable banks to offer loan at lesser rate, which would turn help, the national economy, he said.

On his recently-announced five-point formula to reduce the burden of huge non-performing assets on public sector banks, Sinha said apart from improving the internal mechanism for better project appraisal before sanctioning loans, all-out efforts should be made to heavily punish the wilful defaulters through legal procedures.

He also referred to his suggestions to provide more teeth to the debt recovery tribunals in recovering bad loans.

Asked to comment on lack of consensus on reform process, he regretted that those who had promoted the concept were now turning back.

For instance former Prime Minister Narasimha Rao, who had initiated the process, while he was in office was now one of the bitterest critics, Sinha said.

He also called for a greater political consensus among all political parties for the desired economic growth.

Referring to the role of Left parties towards the reform process, Sinha said their anti-reform stance was well known.

About the non-spending of central funds in West Bengal and some other states, Sinha said though it was not the responsibility of the central government alone to monitor the spending of central fund, the concerned states themselves should ensure proper usage of these monies in time.

Keeping such things in mind, the government had now chalked out a special programme under which all projects would be screened by a central panel before releasing the entire fund for each of them.

However, at present there was no upper limit for such schemes, the finance minister asserted.

To a query on the positive outcome of US President Bill Clinton's visit to India, Sinha said one of the positive outcomes of the visit was the signing of vision agreement ensuring institutional arrangement for different joint venture projects.

UNI

Business