The Hindu Business Line : UPA, Left narrow down differences over banking reforms

THE United Progressive Alliance (UPA) today appears to have narrowed down differences with the Left parties over pending banking reforms by giving an assurance that the restructuring exercise would not result in any significant retrenchment in the sector.

At a UPA-Left coordination committee meeting here on Wednesday, the Left parties on their part are understood to have grudgingly agreed not to come in the way of the Government's move to permit higher FDI limits in private sector banks.

However, they wanted regulatory safeguards to ensure that foreign banks do not swamp the Indian banking sector by takeovers.

The Government side has also agreed to come out with a detailed roadmap for economic reforms that would be discussed with the Left parties.

Apart from the Prime Minister, Dr Manmohan Singh, the meeting was attended by the Chairperson of UPA, Ms Sonia Gandhi; the Finance Minister, Mr P. Chidambaram; the CPI (M) General Secretary, Mr Harkishan Singh Surjeet; the CPI leader, Mr A.B. Bardhan, and other senior Left leaders including Mr Sitaram Yechury and Mr D. Raja.

"It was a general exchange of views on the implementation of the National Common Minimum Programme. The primary discussion was on reforms of the banking sector," Mr Chidambaram told reporters after the meeting.

Rural credit: The meeting also emphasised on greater thrust on rural credit with the Prime Minister assuring that lending target of Rs 1.5 lakh crore for the current fiscal is likely to be exceeded.

Mr Yechury said that the Left parties insisted that the Government should ensure that banking reforms should lead to an improvement of the health of banks, both in the public and the private sector.

Queried on the recent move by the Government to withdraw of Press Note 18, Mr Yechury said that domestic private sector should be protected. He said the Prime Minister clarified several issues raised by the Left parties in this regard.

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