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Separate morality from NPA clean-up: Rajan


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Sam Thiyagarajan
Morality and criminaity
by Sam Thiyagarajan on Apr 19, 2016 05:16 PM  | Hide replies

The captains of the Industry are really the trustees of public money, whether it is equity or bank loan. They have to have a moral commitment to be truthful custodians of the money and live upto the expectations of the people who have given money to them. MR.RR seems to blame the processes like cancelling of licences and delayed approvals and trying to completely exoneraqte extravagant and flamboyant industrialists who splurge money on luxury. Surely Kingfisher didnot suffer because of canclelling or delays. He failed because of his indiscreet ways of spending and investing. Once morality is compromised, then criminality sets in. Morality is a very important component in public life and RR seems to think that morality is not that important. Hair splitting between whether asset is criminal or the promoter is criminal is unimportant. Does he want to throw more and more money into the asset because it is not criminal? NPA levels of banks have become a mountain and the new deposits are not coming into the banking system because the interest rates on deposits are going south all the time. Mr.Rajan has to take a major share of the responsibility and blame for the mess in the banking sector as of today. Instead of taking vigorous steps to clean the augean stable, he is sermonising about morality. I donot know whether he is against coercive action against the criminal industrialists. The errand industrialists will be happy to have a man like RR at the helm in the RBI.

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brajeshwar nath
Re: Morality and criminaity
by brajeshwar nath on Apr 20, 2016 12:53 PM
You seem to have missed the whole point of debate on NPA.If you hold back for a moment, let me explain.NPA happen because loan repayment goes in default. Why does it go in default? because the business/company/organisation.... has not paid back instalments in time and it remains outstanding in the banks books, Right? Why someone has not repaid on time can be due to host of factors? May be there is slump in business or industry concerned is experiencing slow down, market is not picking, customers are not coming back.. etc .etc. Can any one forsee these trends years in advance? Rarely.So, business is about taking risks> or else you don't come in to business, period. And if there is risk, it is for the promotor as well as other stakeholders, too. so, banks as project lenders or corporate lenders too face the risk. Hence all the guidelines to banks about risk weighting and provisioning and income recognition etc. And just because some business has defaulted in payments and is become NPA does not mean the promotor is crook or ill meaning. It can happen to any one, any business, any organisation. Its part of normal.So, lets not attach morality to NPAs issues and look at things in perspective and with objectivity.And yes, just because some loan becomes NPA, it is wrong to think that concerned borrower or business would stop living or spending on himself or his family.So, lets not take judgemental position on NPAs and stop sermonising or else no body would come forward for busines

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Sam Thiyagarajan
Re: Re: Morality and criminaity
by Sam Thiyagarajan on Apr 20, 2016 05:29 PM
NPA happens because of a host of factors, right, but you have wilfully omitted promoters with criminal intentions and wilful defaulters who, evnthough they have the means , not willing to pay up but flee to foreign countries. You have not mentioned a wordabout the wilful defaulters as a reason for NPA. Banks lend money not just to lose them to some crooks in the garb of industrialists. The FICCI who are cajoling the banks to accept to the crooked proposals, has not bothered to utter a word about his wilful defaulting. So much for their fairplay!! Definitely morality is involved in playing with others money and if morality is compromised, then criminality sets in. Without morality you should not venture to run a business, period. Definitely what happened to KFA is not normal but it was waiting to happen what with splurging of money in all kinds of out of business activities. Why the industrialist who has become a wilful defaulter runs away instead of facing the music in this country. Is it not immoral for him to flee? Is he standing the high moral ground in London after swindling money here? If a farmer defaults or if a student defaults, the banks demean the borrowers. But here the banks are getting demeaned by the crooks. This is India .

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Sam Thiyagarajan
Re: Re: Morality and criminaity
by Sam Thiyagarajan on Apr 20, 2016 05:29 PM
NPA happens because of a host of factors, right, but you have wilfully omitted promoters with criminal intentions and wilful defaulters who, evnthough they have the means , not willing to pay up but flee to foreign countries. You have not mentioned a wordabout the wilful defaulters as a reason for NPA. Banks lend money not just to lose them to some crooks in the garb of industrialists. The FICCI who are cajoling the banks to accept to the crooked proposals, has not bothered to utter a word about his wilful defaulting. So much for their fairplay!! Definitely morality is involved in playing with others money and if morality is compromised, then criminality sets in. Without morality you should not venture to run a business, period. Definitely what happened to KFA is not normal but it was waiting to happen what with splurging of money in all kinds of out of business activities. Why the industrialist who has become a wilful defaulter runs away instead of facing the music in this country. Is it not immoral for him to flee? Is he standing the high moral ground in London after swindling money here? If a farmer defaults or if a student defaults, the banks demean the borrowers. But here the banks are getting demeaned by the crooks. This is India .

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Sam Thiyagarajan
Re: Re: Morality and criminaity
by Sam Thiyagarajan on Apr 20, 2016 05:30 PM
NPA happens because of a host of factors, right, but you have wilfully omitted promoters with criminal intentions and wilful defaulters who, evnthough they have the means , not willing to pay up but flee to foreign countries. You have not mentioned a wordabout the wilful defaulters as a reason for NPA. Banks lend money not just to lose them to some crooks in the garb of industrialists. The FICCI who are cajoling the banks to accept to the crooked proposals, has not bothered to utter a word about his wilful defaulting. So much for their fairplay!! Definitely morality is involved in playing with others money and if morality is compromised, then criminality sets in. Without morality you should not venture to run a business, period. Definitely what happened to KFA is not normal but it was waiting to happen what with splurging of money in all kinds of out of business activities. Why the industrialist who has become a wilful defaulter runs away instead of facing the music in this country. Is it not immoral for him to flee? Is he standing the high moral ground in London after swindling money here? If a farmer defaults or if a student defaults, the banks demean the borrowers. But here the banks are getting demeaned by the crooks. This is India .

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