Budget expectations: Banking sector

17 Jan 2022 , 06:04 PM

“We expect the budget to be bolder and move forward in transformation of the public sector banks.  The economy is rapidly transforming with deeper penetration and adoption of technology.  Banking sector is set to have a fundamental makeover requiring institutions that have very strong tech, analytics and design capabilities. This transformation is very tough in the operating framework and constraints of the public sector.  Partial privatization where the government takes down the stake to below 51% is one way forward. 

It will test the resolve of the government.  There is an easy way out to let the public sector banks slide into oblivion with slow decline and eventually be sold off in crisis.  Much like Air India.  That will just deny Indian consumers and businesses better banking and Indian tax payers would be footing the heavy bill for the inefficiencies it sustains over long periods.”

The author of this article is Mr. Saurabh Tripathi, Managing Director and Senior Partner, BCG 

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com