New Delhi, Jan 6 (IANS): Assuring public sector banks (PSBs) of autonomy in functioning as promised by Prime Minister Narendra Modi, the finance ministry has written to them saying the government will not interfere in their commercial decision-making, a statement said Tuesday

"It was conveyed in very clear terms (through circular) that the government will not interfere in the commercial decisions of the (state-run) banks and financial institutions (FIs)," the finance ministry said in a release here Tuesday.

"The banks/FIs should take all commercial decisions in the best interest of the organization without any fear or favour. Each bank/FI should have their own objective, well laid out transfer and posting rules which should be followed strictly," it added.

"Banks should be run professionally, and there will be no political interference. But accountability is essential," Modi said at the two-day 'Gyan Sangam' retreat for bankers at Pune last week.

"The prime minister has urged establishment of global quality banks while stating that the government has no wish to impose itself on the working of banks," Financial Services Secretary Hasmukh Adhiya told reporters in Pune after the retreat.

The government is also considering setting up a bank boards' bureau in order to improve the functioning of the PSBs.

"The bankers at the meet have decided to set up a Bank Investment Company (BIC) in the short run in which the government will transfer its holdings in banks," Adhia added.