Desaraju Surya
Hyderabad: Union Home Minister P Chidambaram has asserted that there was no question of diluting the government's equity in public sector banks from the current 51 per cent. "Public sector banks in the country will remain to be public sector banks," he said, addressing a huge gathering after inaugurating the Union Bank of India's 2501 branch here. Indian economy remained stronger despite the global financial meltdown, thanks to the strong public sector banks. "The previous NDA government sought to dilute government equity in public sector banks to 33 per cent, which was a grave mistake. But on assuming power, the UPA government has abandoned the idea and that has energized the public sector banks," Chidambaram pointed out. Listing out the series of policy initiatives launched by the UPA government to strengthen the public sector banks, the former Union Finance Minister said: "We encouraged banks to raise capital from the market. Thanks to this initiative, business flourished and banks became more efficient. We have also enlarged the power of managements and gave large autonomy to the banks. The degree of autonomy is large and it has increased responsibility. With responsibility, accountability too increased." Also, banks were nudged to go into new areas and double lending to agriculture and small and medium enterprises. New opportunities led to new growth as the banks rose to the occasion and met the challenges, Chidambaram noted. "The last five years have been a complete vindication of the UPA government's banking policy. We, however, still need greater policy support to sustain the growth story," the Union Minister observed. Referring to the Union Bank of India's growth story, Chidambaram said from a business of Rs 50,000 crore in 2000, the bank's business mix shot up to Rs two lakh crore by September 2008. "In the next ten years, UBI's business will touch Rs 10 lakh crore," he added. UBI chairman and managing director M V Nair was also present on the occasion.
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