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Finance Minister P Chidambaram has severely criticised
the bureaucratic way of functioning, particularly in the
banking sector, which has been responsible for the tardy
growth of Indian economy.
Mr Chidambaram said that the need of the hour was to
debureaucratise the banks, public sector undertakings,
ports, road transport, etc, if not the Government as a
whole, at the moment. "Employees in every sector have to
work hard and be efficient, competitive and productive to
bring in prosperity in our society," he said.
Mr Chidambaram was here to attend the inauguration
ceremony of Industrial Investment Bank of India, a
full-fledged development financial institution,
headquartered at Calcutta. The IIBI has been transformed
from the Industrial Reconstruction Bank of India, which
was formed for the rehabilitation of sick industries.
The Finance Minister said, "The truth is bitter, but it
has to be told. It is the bureaucratic way of
functioning that was the main constraint to economic
growth in the country for years. The working people
should be accountable to the people at large, who have
tolerated the hypocrisy for long and remained patient
even in the face of hypocrisy. Now the situation has to
be changed."
He said that banking was a business. Of course they (the
public sector banks) have the social concerns. But they
are to be allowed to function as commercial organisations
so as to become financially viable.
Mr Chidambaram said that the credit-deposit ratio stood
at 61.9 per cent in@March 1996.
But in West Bengal, it stood at 55.7 per cent, where as
in the eastern region as a whole, it stood at 47.7 per
cent. The worst ratio, however, comes from the north-
eastern region, which stood at 34.5 per cent in March
1996.
Citing the grim picture in. the banking sector in eastern
and north eastern regions, Mr Chidambaram said that the
concept of work and productivity had been deteriorated to
a large extent. There is no ethics so far as work is
concerned, he said.
While lamenting on the state of affairs of three Calcutta
- based banks - United Bank of India, Uco Bank, and
Allahabad Bank - Mr Chidambaram said it would be a
mistake to think that they are sick because they are
based in Calcutta. "They are of course headquartered in
Calcutta, but they have country-wide operations. They
have branches everywhere," he argued. "The real problem
lies in large branch networks, large workforce and of
course large non-performing assets," he said.
The Finance Minister categorically said that the average
cost of funds these days is eight per cent while yield
from the advances is around 11 per cent.
"On an average, banks are spending Rs 1.5 lakh per em-
ployee. Hence, every employee should generate at least
Rs 50 lakh business, if not more, for making his bank
profitable," the Finance Minister stated.
Earlier in his inaugural speech, state Chief Minister
Jyoti Basu said such a development financial institution
was long overdue in West Bengal which pioneered the
industrial development during colonial regime.
Condemning the policies and discriminatory of previous
Central Governments, Mr Basu said West Bengal had become
a victim of conspiracy, hatched out by the Central
Governments during the first 40 years of independence.
Mr Basu said the Centre deployed most of its funds else-
where during the first few years of independence for the
growth in industry there. But the funds did never come
back to Bengal.
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