Indian finance minister Arun Jaitley said that the government will be announcing a series of bank reforms to reinvigorate the sector, which is grappling with non-performing assets.
Jaitley also indicated that the government is thinking of reducing its stake in banks but will not totally exit the banking sector, as public sector banks play a major role in financial inclusion through their geographical presence.
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"I don’t think India has reached a stage where the state can pull out of banking altogether. State sector banks have performed an important role, which includes geographical reach and financial inclusion. Banks have an important role to play going forward as well," Jaitley said. He added that banks should be allowed to function independently without political interference.
"The government does have to play at an arm’s length in the functioning of banks. Bank boards have to be professionalised," Jaitley said. He added that the government was committed to pare down its stake in public sector banks to around 51 or 52 per cent.
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