The debate on whether PSU Banks should be made government institutions or not had been in limelight since many years. But, the changing nature of work in PSU Banks have made making PSU Banks as 100% Government institutions as a practical choice. Here’s why :
1. Banks are the one-stop solution for policy implementation.
We all know that PSU Banks are the one stop solution for implementation of government policies. Whether it is some insurance policy like APY, or Aadhar linking program, PSU Banks are given the duty to make sure that the government is able to prove its success.
So, why not make the PSU Banks as full fledged government agency.
2. Banks means compliance to the law in every aspect.
Any person done through the bank is complete in terms of compliance to law (at least most of the times). Here’s a simple example :
A simple amount opening process requires you to provide your identity and address details. And if you are looking to get a loan, banks will leave no stone unturned before giving you the financial support. From verification of KYC records to genuineness of title records of property, it is a part of the job profile of bankers to ascertain that the customer is a law abiding citizen.
That is why, banker’s are often doing the job of income tax department, municipal corporation, valuation and legal services, insurance service distribution and God knows what more.
It is logical to think, at this point, why banks are not designated as government institutions?
3. Banks are the best option to achieve the goals of any present government.
No matter which party is in power, it is the sacred duty of the banks to achieve the targets given by the policy makers. Even if the government changes and reverses the policies in practice, the entire burden of changing the work of previous government is put on the shoulders of the PSU Banks, which in turn follow the commands of the policy makers without any questions.
Is banks were government institutions, government would not be able to threaten them, there would be a better policy framework for the functioning of banks, and bankers would be better remunerated.
So what to conclude?
Making banks a government institution might raise a few doubts regarding the impact on bank’s efficiency, but if we compare the apprehensions against the points discussed hereabove it might appear that making PSU Banks as government institutions might actually be a profitable decision for the government, the bankers, and the people in general.