In
continuity of my earlier post, I would like to take the discussion further in
the matter of ongoing mayhem in the public sector banks. In the third quarter
Banks are estimated to show the losses upto Rs. 25K crs. This is after
registering incomes from various verticals. Although the banks have supported
Indian economy to grow and sustain post-independence, but this can’t be the
argument to give clean chit to the bankers. Bankers should be made accountable
for such huge amount of losses. By the way this is not the end, rather it is
beginning of swachhta abhiyan and we may see more such losses in next 3-4
quarters at least. The accountability
issue is a very serious which if taken seriously, it will affect the confidence
of the bankers to do the business. This does not mean that bankers should be
allowed to go scot free. If the lending in last decade mainly from 2008-2012 is
investigated properly, it may open Pandora box. Bankers have allowed themselves to be affected
by the worms of greed, corruption, political pressures and power hunger.
Bankers,
mainly at higher level, always behave like bureaucrats. They are not easily
accessible, never entertain small
entrepreneur and never be on ground. They rarely try to listen form the
outsiders (It hurts their ego in most of the cases) and information sharing is
almost nil. Market reference from the closed door can never be authenticated.
It is beyond their level to seek information from the unorganised sources.
Bankers depend on a very selective source of information which may be biased
too. The appraisal system is poor and outdated, lack of training, frequent
transfers and promotions, lack of accountability policies and lot many other
factors have contributed to these huge losses. Bankers in the race of
promotions take short term view of serious issues of the clients and pass on
the bucks to the incoming officer. It is almost impossible to catch hold a
banker once he reaches to GM level (even DGM level in many cases).
In
this situation when the house of lenders is not in order, what is the logic of
giving them more and more public money. The impact of losses in the banks is on
other PSUs also like LIC who have invested (by choice or pressure whatever)
heavily into these banks.
There
is urgent need to relook in the manner of lending by the PSU banks otherwise,
hard earned public money will continue to go in drain and we will be cursing
the borrowers only. We should find out :
a)
How
much money has GOI given to the bankers so far to keep them going after
nationalisation?
b)
How
much NPA has been written off by all the PSU banks so far?
c)
How
many senior officers have been made accountable for these losses?
d)
How
many NPA accounts have been revived by ARCs in last 10 years, if not then who
is benefited ultimately?
e)
How
banks can assure that no new loans will get bad ? If they can not guarantee why
they need money just to throw in drainage?
f)
Whether
banks have improved their capabilities now, if so what steps they have taken?
More
in next post.
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