Indian government to shut down loss-making PSU banks

Indian government to shut down loss-making PSU banks

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Asia Bizz: Looking at the non-performing assets (NPA), the Indian government is reportedly expected to take a move and direct state-owned banks to shut down its branches. The shut-down of the branches will cut the staff in the loss-making units.

DK Mittal, the Financial Services Secretary said that this was an ongoing part of the dialogue with the banks as well as the insurance companies. Mittal added that if there were loss-making branches then they need to look into why they are still functioning despite poor figures.

Mittal also stated that if a business strategy is needed, then it might need relocation, or scaling down the staff.

On the sidelines of a CII event in Delhi, Mittal said that ultimately the branches have been set up to earn and if the branches are making losses for about 12 months then there is a need to look at it.

In the country, there are around 87,000 branches of the public sector banks. The increase in interest rates and the slowdown in the economy has put an impact on the repayment capacity of the borrowers.