Friday, July 28 2006 17:58 Hrs (IST) - World Time -

New Delhi: As a strike against outsourcing functions of state-run banks upset banking operations across the country, Finance Minister P Chidambaram today (July 28, 2006) said there was no move to privatise public sector banks either through the 'back-door or front-door'.

Responding to a calling attention motion in the Lok Sabha, he sought to dismiss apprehensions that the draft guidelines by RBI on outsourcing some non-core activities would lead to privatisation.

"One should not be carried away by misinformation and half information. These are only draft guidelines. It is premature to come to any conclusion", the Minister said, asking people to have faith in banking regulator RBI.

"There is no back-door or front-door privatisaion," he said.

"Noting that the guidelines would be finalised by RBI after taking into consideration all upsides and downsides", he said the regulator was doing a good job and India's banking system has become very strong with the non-performing assets coming down significantly.

Dismissing fears of members that corporates would take over major task of banks in reaching the countryside, he said that even in 2005-06, public sector banks had opened 1,026 branches.

At the same time, he said the government was committed to financial inclusion and outreach through innovative models.

"A matter cannot be frozen in a point of time. We must pursue innovative, forward looking and progressive measures," he said.