broader public policy aspects. one is that as a dominant owner, the conduct of the government will play an important part in these changes. second, and more important, the type of signals that are required to build a consensus with the trade unions will arise out of public policy in general and public policy not necessarily restricted only to banks. in this context, how the public policy aligns itself towards efficiency and incentive / disincentive measures becomes relevant. there is a need for a clear signal from public policy and we have to actively seek such an appropriate policy. we must not hope that we will be in a position to fix things in an isolated manner for too long. in a way fixing things in banking, especially restricted to a few banks, in an isolated manner may limit or even jeopardise the extent to which we can move forward in the future. a reference was also made by dr sushil chandra to work practices. once we accept the work force as “ given ” in indian conditions, i do not see a very practical way of telling a large work force that they should simply “ go home ”. i strongly believe that the quality of human resource is very high in public sector banks. there is hardly any banking system in the world which is so highly involved in retail banking and which has such high quality manpower as the indian public sector banks. in a way, the tragedy is that the work atmosphere, especially work - practices, have not been very conducive to efficiency. between reduction in manpower and expansion of business, the latter is a better option ; and banks have to create an environment in which they will be able to ensure expansion of business through more redeployment, more training and better incentives. if labour force is given, there is an imperative need to find business to afford their wages, and so public sector banks may have to diversify, namely, sell insurance policies, or sell private mutual fund certificates or do any permissible non - fund based business. since banks have the manpower, they have to learn to treat it as a resource and ensure that it pays for itself. the whole issue again reverts to work practices and unless restrictive practices are addressed to impart flexibility to enable rapid expansion of business through diversification, there may be a threat of decay. the flexibility and autonomy for each bank to find unique solutions is important because there is no “ fixed solution ” for all institutions and all problems. for instance, i hear that there are

sort of peep into the future. unlike thailand or korea, our bank restructuring will be a lot more domestically led and the enabling environment will have to be created by the government and the rbi. in the presentation on bank restructuring in india in terms of tables and graphs, one finds both banks and financial institutions participating together. in other words, when we talk of restructuring in the banking system, perhaps it is necessary to focus on restructuring in the financial sector and the financial system as a whole and not look at the banking industry alone internally. almost all the illustrations, which have been presented, except the two cases of mergers, have such a mix and in future perhaps the coverage would include the insurance sector, also to which a reference was indeed made. chairmen ’ s session during the session, discussion of the chairmen of banks, two major points or themes came up very openly and one more not so openly. one, there was virtual unanimity on the need for flexibility in dealing with the staff, in dealing with issues, in dealing with operational procedures such as signing of drafts, etc. the second theme was on the need for autonomy, especially in areas such as recruitment of personnel. the most critical issue obviously is to ensure the necessary operational flexibility and autonomy, which are imperative if banks are to be in a position to face the future confidently. more importantly, the implied suggestion was that in a very broad sense, both the government and the rbi as regulators, should attempt some sort of regulatory refocusing in the direction of greater flexibility and autonomy. concluding remarks i will conclude by commenting a little more on these three aspects, namely flexibility, autonomy and regulatory refocus. as you have discussed, be it the use of it or hr, bank managements require flexibility. the more one listens to the various discussions, the more one is convinced that most of the suggestions fall under the category of flexibility. second, is the autonomy ; and, one question here is how does a business executive operate with a small degree of autonomy and compete with others in the non - public sector. this is operational autonomy, which could be accorded by making the public sector banks genuinely board - run companies. the other question, and a more important one, relates to autonomy to ensure some organisational transformations. for instance, there was a hint in the discussion that in rural areas, existence of bank branches, cooperatives, rrbs and local players results in avoidable duplication. in my view, these