Apart from what is expressed by my fellow countrymen, I am of a firm opinion that the majority share holder of the PSU Banks being government of India is more focussed towards practicing SOCIAL BANKING rather than COMMERCIAL BANKING. PSU Banks are being used as a tool for fulfilling their political obligation. Secondly, the Political interference to the Credit out flow of the PSU Banks is one of the major concerns. Thirdly, the lack of Monitoring the apparent sickness noticed in Performing Assets is another reason for the NPAs. Very well judged article written by the author. Congratulations.
Disease was long detected, its proliferation and severity was well known, no attempt to find out drug forget about vaccine. CURE IS BETTER THAN PREVENTION ALSO TOTALLY FAILED.
Some reasons: 1. Loans granted as a result of corrupt practises. 2. Not monitoring how the money is used. Bank should have the power of monitoring all the expenses of the company. Should check if companies are not spending for the luxurious lifestyle of a director. 3 should not tolerate defaults. May condon for a reasonable period for genuine difficulties. 4. Bank must be taking personal guarantees of directors as was and probably is the practice. Must proceed against them and their personal assets.
5.Trusts are created from which even if a director has defaulted, he is able to have luxurious living also they have pvt cos which finance their luxuries. Suitable law must be enacted to get over this difficulty. In case of very large loans banks must immediately take steps to enforce and in case wants time take personal guarantees from members of family eg. wife, children if they have assets in their hand or are doing business and parents in case they are in business or have assets. There is a practice prevailing to transfer/create assets in the hands of such relatives. If gOvt is serious and applies its mind they may find many such ways to protect public money.
Re: NPA
by WILSON CHANDRAN on Feb 18, 2016 11:12 AM
Sir, not as you said. For everything what you stated is being taken care of at the time of lending and documented also. Despite all if an individual or a company involved in a fraudulent, the bankers are to get recovery only through Court only. Needless to state as to how long the a judgement they get. If execution petition filed that also restricted through court. After a long time finally the banks win. Think of: the time taken, blocking for funds, time, manpower and money spent by bankers etc. Hence bankers are go for compromise to avoid such problems for atleast the money recovered could utilise for further lending. Also please note all companies, business etc long last for certain period of years afterwards it naturally declines for various reasons - when the cycle ends. Under such circumstances the banks are also affected.
Lot has been promised about bringing back black money stashed abroad, however much more serious problem is bad debts of PSU banks, which is estimated to be more than Rs800,00,000crores over the years. Will our Hon PM offer a time bound programme to recover atleast 10% of this amount?
Re: Bad debts
by yahoo on Feb 17, 2016 01:44 PM
Well, what do you think they are doing now? The UPA did not have the courage to do what was required and kept making it worse. Now, unfortunately the NDA has to deal with the fire.
Bad loan is also scam like 2G Scam, Coal scam bank scam is the biggest scam need to investigate under court monitoring by CBI need to punish culprit. Bad loan need to recover immediately.
Well written article. Non Performing Assets increase in Banking sector means the failure of some sectors namely manufacturing, agriculture, exports etc. It reflects government's failure-may lead to a big threat in Indian economy. Defending with reasons do not serve any purpose. FM should take corrective measures immediately. The article quotes Banking will remain but PSU banks will remain - It raises many doubts.
Bad people enjoying banking money for free is going away...the pain will exist until good people gain confidence of the govt and they start participating in building business with good intentions
Bank loss means undue gain of cony businessman and politicians. Only the rule of law enforcement can provide justice which needs a good government. The real truth is in dark so common citizens will fail to act correctly . It is a good informative article.
