Although privatisation is not a panacea, public discussion has emphasized “the benefits it will derive from less political interference and politically-directed lending that public ownership has led to in the past”, said Subramanian. Experts said privatisation of state-owned banks can help make them more self-reliant. “Under private ownership, banks tend to stand on their feet and adopt a really profitable business model rather than relying on state support of various kinds. He also pitched for taking out stressed loans from bank balance sheets to improve their valuations and help in raising capital from markets. Subramanian added that the annual interest cost of these bonds to the central government would be about Rs8,000-9,000 crore.

Source: Mint October 25, 2017 12:00 UTC