• During an industry event, Finance Minister said the government is open to discuss the issues that the Reserve Bank of India (RBI) had raised recently over the lack of powers in regulating state-run lenders.

• Amidst criticism that the apex bank had failed in its regulatory oversight over government-owned banks following the Rs 13,500-crore PNB scam, RBI governor had recently blamed it on the lack of powers to control them.

• Responding to the RBI's concern, Minister said the government is open to discuss with the RBI all the issues it has on regulating state-run banks.

• The minister also ruled out government pairing its stake in public sector banks (PSBs).
• The statement comes amidst strong opposition from banking and LIC unions to the government plans to sell its majority stake in the crippled IDBI Bank to LIC.

• Admitting that the banking system has failed the public in meeting their high expectations of them, Goyal said bankers have failed to live up to the high standards and ethics expected of them.
• He also said the government will back all the state-run banks with enough capital.

• Various committees have raised concerns over the regulation and governance of PSBs.
• P J Nayak Committee Report (2014) had said that PSBs are subject to directions of the Ministry of Finance, Government of India (GOI). This dichotomy in the regulation of PSBs is discriminatory.
• It had said, RBI should be the sole regulator for PSBs and private banks.

Other Recommendations :

• Increase independence of PSB’s board of directors and level playing field for private banks & PSBs.

• Establish Banking Investment Company (BIC) – a holding company for shares of PSBs.

• Until the BIC is formed, establish Bank Board Bureau (BBB) to streamline the process for appointment of directors of PSBs. At a later stage, BBB’s role must be transferred to the BIC.

The Hindu, Indian Express.