New Delhi [India], April 25 (ANI): Former economic affairs secretary Shaktikanta Das claimed that it was time to set up a 'holding company' for public sector banks (PSBs), in the wake of the recent economic reforms.
"It is my personal opinion that the government should make a holding company for public sector banks. There are around 21 such banks. I feel that around ten should be retained as it is, and the rest should be merged or taken over. The creation of a holding company will allow shares of these PSBs to be transferred," Das said while delivering the 30th lecture of the "Lecture Series" organised by the Central Vigilance Commission here on Tuesday.
He further opined that these holding companies should be allowed to raise funds from capital markets, so that the government does not need to recapitalise these banks, thereby paving way for better use of funds allocated for recapitalisation.
The Finance Commission member also addressed the need for correcting the Debt/GDP ratio and the importance of improving the quality of public expenditure. He further noted that measures such as the use of outcome budget, ending of the vote on account due to the shifting of the budget date, merger of the railway budget with the general budget and ending the distinction between plan and non-plan expenditure were important structural reforms in this process.
"These measures have had a positive impact on the quality of public expenditure," he added. (ANI)