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. Banks cann't help.
Banks are able to run behind small borrowers, not corporate borrowers. Bankers going to meet these corporate heads heavily indebted to banking sector are greeted by Dogs. Borrower has no time to meek bank officials. Courts take their own sweet time. DRT and SARFAESI also are of minimal use as every move is stalled by the defaulting borrower by dragging to court.
There is no consensus on publising names of these defaulters to name and sham for recovery. Fiance ministry has been advising PSU banks to focus and speed up recovery. Why not they consider publising name and photo of people failing to repay bank loan a legal requirement form bankers. RBI also can advise this in the interest of banking industry.
Diversion of funds is rampant in corporate accounts today , which is a great danger signal.
Political situation in he country is still worse. Scan after scam are tumbling out of the cupboards of Central Governement headed by congress. NO unity with in the ministry . Misuse of CBI for longivity of the central govt. Really we are in a very sorry condition.Foreign investors are withdrawing the money partly because of weakening rupee and partly out of fear of Fed withdrawing monetary easing and political situation adds to the negative sentiment.
Where is the solution. The country of great ethical values has become bankrupt ethically both in business and politics. where is the solution? Change in government? probably one hope. We pray God and contribute our bit in inculcating ethical values right from childhood and at school college levels to have a better tomorrow. We must teach indian phylosophy at school level to students.Next generation is only the hope and provided we work with that goal in mind.
Let us hope for the best. Wish you all all the best. Jai Bharat Mata Ki.
Best Regards,
Sathya
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. Banks cann't help.
Banks are able to run behind small borrowers, not corporate borrowers. Bankers going to meet these corporate heads heavily indebted to banking sector are greeted by Dogs. Borrower has no time to meek bank officials. Courts take their own sweet time. DRT and SARFAESI also are of minimal use as every move is stalled by the defaulting borrower by dragging to court.
There is no consensus on publising names of these defaulters to name and sham for recovery. Fiance ministry has been advising PSU banks to focus and speed up recovery. Why not they consider publising name and photo of people failing to repay bank loan a legal requirement form bankers. RBI also can advise this in the interest of banking industry.
Diversion of funds is rampant in corporate accounts today , which is a great danger signal.
Political situation in he country is still worse. Scan after scam are tumbling out of the cupboards of Central Governement headed by congress. NO unity with in the ministry . Misuse of CBI for longivity of the central govt. Really we are in a very sorry condition.Foreign investors are withdrawing the money partly because of weakening rupee and partly out of fear of Fed withdrawing monetary easing and political situation adds to the negative sentiment.
Where is the solution. The country of great ethical values has become bankrupt ethically both in business and politics. where is the solution? Change in government? probably one hope. We pray God and contribute our bit in inculcating ethical values right from childhood and at school college levels to have a better tomorrow. We must teach indian phylosophy at school level to students.Next generation is only the hope and provided we work with that goal in mind.
Let us hope for the best. Wish you all all the best. Jai Bharat Mata Ki.
Best Regards,
Sathya
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