Proper steps have been taken to guide the banking sector to see that the banks pass through this transition phase by and large successfully. The reforms initiated in the banking sector have now reached a crucial stage. Government’s stake in some PSBs is reduced and as a consequence public equity in these PSBs is enlarged.
This led to greater responsibility on the bank managements since the level of accountability has increased. Pressures of performance and profitability will keep them on their toes all the time as the public shareholders expect good performance along with good returns on their equity. Many PSBs have already started the exercise of cleaning up of their balance sheets by shedding the excess baggage.