Narendra Modi, India’s prime minister, has moved to address worries about his flagging economic reform agenda with a pledge to shake-up India’s banking sector and the likely appointment of market-friendly economist Arvind Panagariya to head a government think-tank.
Mr Modi endured a frustrating end to 2014 as parliamentary deadlock stymied major legislation, prompting his administration to pass temporary ordinances in areas such as helping businesses to purchase land for development projects.
To regain momentum, Mr Modi this weekend pledged to give greater independence to struggling public sector lenders, while tempting global investors to participate in plans to raise Rs1.6 trillion ($26 billion) by selling down government bank stakes.
Speaking at a summit of the heads of all of India’s public sector financial institutions, Mr Modi promised to end the country’s heritage of “lazy banking”, a term often used to criticize risk-averse lenders.
Addressing concerns that banks face political pressure to give loans to favoredcompanies, Mr Modi said lenders “would be run professionally” in future, and promised “no interference” from New Delhi.
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