Commenting on the recent move by the United States government tightening the H-1B visa policy, Reserve Bank of India Governor Urjit Patel on Monday warned against “protectionism” and said a country’s policies should not come in the way of sourcing the best talent from across the world. “Where would Apple be, where would Cisco be, where would IBM be if they were not sourcing the best products and talent from across the world,” he said in a lecture at New York’s Columbia University.
Patel said the biggest wealth creators of a country are ultimately affected by protectionism. “You do not know what are the implications of some of these policies on equity and distribution besides [the] objectives that you want to address,” he said.
Talking about the Indian banking system, the RBI chief said if some public sector banks were to be merged, it might help in dealing with the problem of non-performing assets. “The system could be better off if they are consolidated into fewer but healthier banks,” Patel said.
He further said the merger of some banks would only lead to savings through the consolidation of bank branches and its operations. A younger, digital-savvy team could be hired to expand online banking operations, while some employees could be offered buyouts, he suggested. Divestment in the public sector banks would also improve the banking sector’s overall health, he added.
“The weaker banks are losing market share [and ] that is a good thing...The stronger banks are gaining market share, which is a good thing, particularly the private sector banks. In a way it is working; those who need to shrink are shrinking,” he added.