Congress to cut PSBs to 6-8 from 18 to fortify banks

New Delhi, April 2 (IANS) Accusing the Narendra Modi government of weakening the country's banking sector, Congress President Rahul Gandhi on Tuesday promised to reduce the number of public sector banks (PSBs) to six-eight from 18 through mergers, if its comes to power this election.

"The Congress will amalgamate two or more PSBs to have only 6-8 PSBs with national presence and reach. Each of the merged PSBs will be adequately capitalised," Gandhi said while unveiling the party manifesto.

The Congress Chief accused the Prime Minister of wrecking the economy and throwing the country into an "economic emergency" through decisions, like demonetisation, GST (goods and services tax), apart from ruining the country's banking sector through the steep rise in non-performing assets (NPAs).

"The BJP government has considerably weakened the banking sector in the last five years. There has been a sharp rise in non-performing assets. Crony capitalism has thrived and deserving sectors and individuals have been denied credit," the manifesto said.

Gandhi said the narrative for the Lok Sabha elections was all about economic issues and the Congress promised a comprehensive review of the concept, role and functions of PSBs and their governance structure to make them robust and competitive with healthy balance sheets.

The Congress has also promised to abolish the redundant Banking Board Bureau, promote new development banks and formation of state and regional-level institutions to fund micro, small and medium enterprises (MSMEs).

The Congress plans to encourage state governments to revive the State Financial Corporations (SFCs) to provide long-term credit and risk capital to MSMEs. Further, it will strengthen the regulatory regime of the non-banking financial companies (NBFCs) to prevent failures.

"We will take the necessary policy and administrative measures to develop a robust, deep and liquid corporate bond market, municipal bond market and infrastructure investment trusts," the manifesto said, adding it will also deepen and broaden the securities market.

Considering the barriers faced by technology companies in accessing capital to scale up to global size and standards, the Congress promised to set up an Indian global companies fund and create a policy environment to support these companies become global giants.