FE CFO Awards 2018: Governance structure of banks needs a relook, says Bibek Debroy

Reacting to a question on job losses in the country owing to automation and artificial intelligence, Debroy said that India should not worry about artificial intelligence and automation taking away jobs till 2040 as labour will be cheaper than technology.

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The awardees of the second edition of the FE CFO Awards at the function in Mumbai on Tuesday. (Express Photo: Prashant Nadkar)

Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council, on Tuesday said the banking sector needs to be cleaned up and the governance structure of the banks should be looked at.

“The banking sector needs to be cleaned up in more than one way. And it’s not necessarily the case that private sector banks have covered themselves with glory. May be the scale may be smaller. So far as the public sector banks are concerned we need to look at their governance structures and we need to examine whether this number of public sector banks need to continue or whether there can be rationalisation,” said Debroy who spoke at the FE CFO Awards in Mumbai.

Debroy was in conversation with Sunil Jain, Managing Editor, Financial Express.

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Debroy said that one should venture to say anything right now because the government’s recapitalisation of public sector banks is not an across the board recapitalisation. “The recapitalisation is linked to some kind of restructuring of public sector banks and we should wait for the details of that to come up,” said Debroy.

He also said while the suggestions of privatisation of public sector banks are well intended, they “ignore the reality in true sense”.

“If I try to privatise public sector banks today, give them not just their assets but their liabilities, I would probably not get many takers ,” said Debroy.

He also said that the Bank Board Bureau, the Reserve Bank of India and the Finance Ministry are trying to work out some better way of regulating the banks.

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Reacting to a question on job losses in the country owing to automation and artificial intelligence, Debroy said that India should not worry about artificial intelligence and automation taking away jobs till 2040 as labour will be cheaper than technology. “In every society, old jobs go away and news jobs are created. As long as net-net news jobs are created we should be fine…There are some sectors where artificial intelligence will take away jobs but overall for the country as a whole, let countries where labour is scarce worry about artificial intelligence, let us worry about human intelligence,” said Debroy.

Winners

CFO of the Year: Seshagiri Rao, JSW Steel
CFO Lifetime Achievement: Bharat Doshi, Ex-M&M
CFO Newsmaker of the Year: Anshula Kant, SBI