Indian Finance Minister Arun Jaitley has not yet decided on the exact recapitalization figures for the public sector banks. Speaking at a public event at the Stanford University, he revealed that though he had mentioned a recapitalization figure in the budget, the requirement is much more than the mentioned figure. The Indian government has decided for the recapitalization of public sector banks and has brought down the government’s stakes in the banks to 52 percent. This is expected to help raise the private capital. Jaitley mentioned that the government intends to induct some money into the banks from budgetary resources of this year as well as the next year.
Jaitley praised the positive role played by the banks in promoting Indian businesses such as pushing up the stalled infrastructure projects. He further pointed out the large network and the strength of the state-owned banks and has lauded their tremendous efforts in delivering social responsibilities has led to a huge impact. But the minister mentioned that the public sector banks have fared poorly in delinking management from pressures related to appointments and enactment. The finance minister has also welcomed the participation of the private sector banks which are coming up in the competition. However, the private sector banks are lagging behind in performing their social responsibilities.
Jaitly cited that after he took over, a highly professional system has been put in place to induct people into these banks, segregating the positions of the Chairman and the CEO. The positions of the Chairman and the CEO in these banks are expected to be filled up soon as the selection are in the final stages. For people coming from the private banking sector, the state-owned banks have opened executive positions. Regarding Asian Infrastructure Investment Bank, the finance minister mentioned that India will be the second largest stakeholder in it after China.