Senior Congress leader Jairam Ramesh on Tuesday said he strongly disagreed with Nobel laureate Abhijit Banerjee's view that the government should privatise public sector banks (PSBs) to tackle the banking crisis in the country. The former Union minister's remarks came after Banerjee, at a media interaction earlier in the day, termed the banking crisis in the country "frightening" and called for a reduction of government stake in public sector banks to deal with the situation. The Indian-American Nobel laureate said the government should reduce its stake in public sector banks to below 50% so that they are out of the ambit of Central Vigilance Commission, whose fear acts as a dampener in decision making in the banking sector.
"While I am in awe of Abhijit Banerjee's intellectual prowess I disagree strongly with him that govt should privatise public sector banks," Ramesh said on Twitter. The banking system has been afflicted by the scourge of high NPAs (non-performing assets) for nearly five years now. The NPAs have led to net worth erosion and discovery of scams in the sector, with the Punjab and Maharashtra Cooperative Bank being the latest addition to the list.