Their bonds at least, if S&P is to be believed
“You
But rather than berating S&P, policy makers should realise that SBI’s miserable downgrading by S&P is a true reflection of the redundant policies of the government towards the entire banking system. Think about it! Almost none of the PSBs come close to adhering to the most imperative Basel II norms; and worse is how conveniently RBI, rather than forcing PSBs, has found it easier to shift the deadline of such adherence to 2008 (from 2007). It’s a no-brainer that it is the government that has to be blamed. Be it the recent decision of the Finance Ministry to buy 59% stake in SBI or the minimum government ownership of 51% in all public sector banks, or asking the PSBs to ‘consult’ the Finance Ministry before they make any adjustment in lending rates or the 10% voting rights ceiling in private sector banks, the government has failed in making PSBs worldclass. And now, with SBI investing $1.3 billion in ICICI Bank’s most recent FPO, self-obsessed PSBs seem to have even gained the audacity to go openly against clear RBI norms of banks not having cross-holdings. State Bank of India and junk rating? You bet!
A. Sandeep Editor Business & Economy
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
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