“This action also signals that the RBI is able to provide policy support to the real economy and help its recovery”, he said adding the government will work to facilitate transmission of the rate cut by banks.
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Jaitley said the government will review small savings’ interest rates, which some banks consider to be high prohibiting them from cutting lending rates. The combined debt of discoms is estimated to be more than Rs 3 lakh crores leading to acute financial stress in the banking sector. In a stern message to the State power utilities, Jaitely said that the banks can not be expected to bail out the defaulters. Mr Jaitley said the Dispute Resolution Tribunal’s work would be speeded up by moving most transactions online. Jaitley said there were a few states that were yet to implement power reforms, and the situation would not improve unless the users were made to pay for the electricity consumed. “A meeting was held at the level of Prime Minister and some important changes and reforms in relation to these states where the discoms are in distress have been worked out”. He also said the proposed new Arbitration Law provides for Fast Track Arbitration with one member Arbitration Board, with a mandate to complete the entire process within six months.
Public sector banks (PSBs) can soon look forward to some improvements in their recruitment practises to bring them on a level-playing field with their private sector peers, according to Finance Minister Arun Jaitley. The minister said PSU banks must be given independence from political decision-making and their decisions should be based only on banking merits.
Efforts are now on to give final shape to the banking bureau where all personnel decisions with regards to the bank can also be professionalised, Jaitley added.
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“We have appointed a panel headed by Justice A P Shah to find options of hiring best quality talent”, he said.
