Money Matters E08 | Banking in India, From nationalisation to privatisation (3/3)
It is true that, thus far, neoliberal reform has not succeeded in reversing nationalisation, though public shareholding in most government-owned banks has been significantly diluted.
Since the early 1990s, even without full denationalisation, the achievements of nationalisation have been eroded by liberalising reforms in banking and the financial sector, which have undermined priority sector lending and reduced the geographical spread of banks. Using recommendations of the Narasimhan Committee, profitability was made the criterion for opening or maintaining bank branches and priority sector norms were diluted by removing the minimum allocation for agriculture and introducing a much larger range of activities into the priority sector.
We discuss this issue in this episode of Money Matters with expert inputs from renowned economist Prabhat Patnaik, CH Venkatachalam, General Secretary, AIBEA, Thomas Franco, Former General Secretary, AIBOC.