Governance more important than ownership of banks, says SBI chairman

Ultimately it doesn't matter who owns, what matters is how it is governed, SBI Chairman Rajnish Kumar said | File photo: PTI
State Bank of India (SBI) chairman Rajnish Kumar on Monday said it doesn’t matter who owns a bank but what matters is how it is governed.

His statement comes amid the Centre’s plan to bring down government stake in some public sector banks (PSBs).

In his speech at the Seventh G Ramachandran Memorial Lecture organised by South India Chamber of Commerce & Industry, he said the banking system has developed a lot.

“There are only two choices. Small private sector companies must find a niche for themselves. Otherwise, they cannot compete against the large public or private sector,” he said.

The move to privatise some public sector banks will not do any harm to the banking sector or the economy, he felt.

“We have a scenario where SBI, and at least six large banks, post merger, can take care of the social banking agenda of the government while the rest can be in the private sector,” said Kumar.

The general perception is that if the private sector goes down, it is not tax payers’ money. “I don’t believe in that. Any enterprise going there is a loss to the taxpayers, be it private or public. Closure of any enterprise is against the interest of the common man and the tax payers of the country,” he added.

Speaking on digitisation, he said, mobile banking may become the most preferred banking channel, even more than internet banking, in the days to come.

“Out of 100 transactions at SBI, only nine are being made in branches. While transactions at ATMs at the time of demonetisation were around 55 per cent, now they are down to around 30 per cent. Digital and mobile banking have seen a rise from 25-30 per cent to 55 per cent now. Going ahead, internet banking and mobile banking are likely to flourish,” he added.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel