Indian banking sector’s health remains robust, govt policy working very well: Top bankers

New Delhi: As Rahul Gandhi’s allegations about the poor condition of Indian banks, especially public sector banks (PSBs), fizzled out, Dinesh Khara, former Chairman of State Bank of India (SBI), said on Thursday that the country’s banking sector is performing professionally on all parameters like capitalisation and asset quality.

Speaking to IANS, Khara said the banking sector in the country is working in a very professional and efficient manner and the health of the sector remains robust.

Khara further stated that all the banks have been well capitalised and due to this, “the capital adequacy is as per the criteria”.

“Due to improvement in the asset quality of the banks, the health of the entire sector remains good and through this, the country's economic development is also being supported well,” he told IANS.

Khara said that the perception about India remains good at the global level and under the leadership of Prime Minister Narendra Modi, the acceptance of the country has increased all over the world.

“After the G20 Summit, it has improved further. India is being considered a responsible leader in South Asia,” he noted.

On the question of morale of the employees being lowered due to politically-heated statements, Khara said the morale of the bank employees is determined by the sector leadership.

“Also, all the bank employees understand that in a democracy, everyone has the right to express their opinion,” he added.

"It is understood that those working in the bank are fully aware of the bank's situation. Therefore, I believe they do not need any additional information to understand the state of the banking sector and the current position of the bank,” he added.

His comments came as Union Finance Minister Nirmala Sitharaman issued a strong rebuttal of allegations made by Leader of Opposition (LoP) Rahul Gandhi on the performance of India’s banking sector, especially Public Sector Banks (PSBs), stressing that during the United Progressive Alliance (UPA) tenure, PSBs were treated as ‘ATMs’ for their 'cronies and shady businessmen'.

Rajiv Kumar Bakshi, former Chairman at Bank of Baroda, told IANS that the condition of the banking sector is very good right now.

“The banking sector is in a very good shape right now and the credit cost has also reduced. The risk towards banking has also reduced. This is a very good time for banking,” he mentioned.

“The government’s banking policy is working very well, and the economy has also improved. Despite Covid-19 pandemic when many businesses were shut, the government handled the overall situation very well. The government took some concrete steps which have boosted the sector,” he added.