The General Secretary of Communist Party of India (CPI), AB Bardhan has said that government-owned banks do not require World Bank loans.

His letter to Prime Minister, manmohan Singh said, "I learnt with deep concern that the government has approached the World Bank for a $3 bn loan to capitalise our public sector undertaking (PSU) banks and am further worried to learn that the World Bank has already sanctioned a sum of $2 bn as the first instalment."

Supporting his view, Bardhan said that the PSU banks were not required to meet the same capital adequacy norms as private banks since PSU banks were backed by government.

He said that even if there was an urgent need of funds it could be met by either the government or the Initial Public Offering (IPO) route, which is allowed under the present norms.

In the letter, Bardhan had argued that amount of $2bn or Rs. 10,000 crore was not too much to be afforded by the government.

"At a time when the World Bank's policies are subjected to question and review due to its role in the present global economic crisis, it is perhaps inappropriate and quite intriguing why our country should go to World Bank for this loan," Bardhan asked.loan