Abhijit Banerjee Calls For Reducing Centre’s Equity In PSU Banks For Solving Banking Crisis

Nobel laureate Abhijit Banerjee said on Tuesday that the government’s equity in public sector banks should be reduced to below 50 per cent to end fear psychosis among bankers.”The banking crisis is frightening. We should worry about it. We should be more vigilant…One day the bank is fine and then suddenly it is in crisis…We should be able to stop the crisis much ahead before it happens,” the Indian American economist said. Flagging concerns about banking crisis in India, he called for aggressive changes to deal with the situation. There is a need to bring in important and aggressive changes to deal with the crisis, he said .Thee is need to bring down stake of the government to below 50 per cent in banks so that the decisions are taken without fear of Central Vigilance Commission (CVC).He was interacting with media after meeting PM Modi. He said “We need some important and aggressive changes.” The fear of investigation by the Central Vigilance Commission (CVC) in default cases had paralysed the banking system and bankers do not want to lend.”Reducing government equity in public sector banks to under 51 per cent will take them out of the CVC’s purview, he said. Refusing to get into questions on the economy or any controversial topic, Dr Banerjee said in a meeting earlier in the morning, Prime Minister Narendra Modi had “cracked a joke” that the media was trying to trap him and “get him to say anti-Modi things”, reports   NDTV. Flagging concerns about banking crisis in India, he called for aggressive changes to deal with the situation.