Indian Banking Industry - Road ahead is bumpy
Dear Friends, We have been patting our Banks for the robust performance of Indian Banks at a time when global banks were melting. Credit goes to conservative policies of regulator. RBI deserves Kudos. However, Indian banking industry is not in quite good shape today. NPA is high and raising. Recorey is very low and write off is heavy as pointed out by regualotor recently. Whose money is it we are writing off? why this pathetic condition? Despite RBIs stringent IRAC norms and also auto NPA marking by Banks, it is the fact all Bank executives today know, NPAs are understated by every bank. RBI has introduced Restructuring , corporate Debt restructuring (CDR) for helping Industries in real difficulties , thus is hugely mis-used. This is because , the ethical level at majority of corporates is very low, as known to every indian citizen. Corporates siffon off money into subsidiaries, by inflating invoices etc., Make the unit sick, get all possible benefits and finally may pay or no.