Open Letter to Reserve Bank of India

I have sent a mail requesting you to make an analysis of real health of Public Sector banks. I have devised a format for the same and hope you will seek information from PS banks. To start with, you may seek such information from top five or six banks in Jharkhand state, Tamilnadu state, Maharashtra state , Utttar Pradesh and Assam. Five state, five banks and at least five circles will give a rough idea about real health of the bank. You may get quick information from those banks where CBS facility is in full swing.

After thorough analysis of the reports thus received you may identify bad officials and ascertain the root cause of continuous rising NPA. It is worthwhile to mention here that inspite of all efforts said to have been taken by you and all banks to improve the quality of assets , NPA in PS banks has been rising year after year.

I am happy that RBI governor has ultimately accepted the bitter truth that baffling data given by various agencies are not reliable and hence the conclusions arrived at on the basis of such cooked up data leads to formation of wrong policies and failure in execution of plan .Last month Mr. K Chakraborty Dy Governor of RBI had also admitted that health of Bank assets is not as good as projected by CEOs of various financial institutes. He further admitted how financial data changes after change of chief of the bank and similarly how profit of branch of a bank goes down and Gross NPA of that branch goes up after change of Branch Manager of that branch of the Bank.

I am happy because realization of bitter truth can only force the policy makers to introspect into their working style, to assess performance of various banks, to take corrective steps , to punish bad bankers, to frame effective HR policies, to give justice to rejected officials who are not flatterers of their bosses and so on.

In one of the report published by RBI it is said that total of Non Performing Assets in Public Sector banks in India is likely to remain maximum 3% of total advances. I fully differ with this conclusion. I had therefore suggested through my previous Emails to RBI to demand report from all PSBs in three formats and now I suggest following four formats which seek information on quality of HR policy and role of bribe in promotion and posting of officers in various scales.

It is observed that health of many branches of public sector bank is facing continuous erosion due to continuous rise in amount of Non Performing Assets and due to write off of loan year after year. There may be so many reasons for critical illness of the branch but there is always one reason which is arbitrary promotion and posting forcing officers to flatter to big bosses , spend money on giving gifts to bosses , earn through unfair means and not bother for quality of lending.

In report 1 to 3 I have sought information on branches where proportion of NPA is more than 10% of total advances of the branch as against bank average being less than 3 %.

Format 4 to 7 deals with details of borrowers and format 8 to 11 which will try to precipitate name of officers due to whose malicious intention, ill motivated actions, bribe led lending the branch has/ had to suffer loss in write off and compromise settlement or spend money in legal actions which could otherwise be avoided.

Such reports on proper and honest analysis will definitely give enough indication about culture of top officials of the bank and also expose the quality of HR policies and quality of its execution.

I take this opportunity to submit before you what I expect from you because
Our Finance Minister is scheduled to meet Chiefs of all banks on 8th of July 2011 and of course the meeting will be attended by RBI officials too as also by officials of banking divison, legal departments and Ministry of Home.

If you concur with formats of reports drafted by me ,you may quickly redraft the formats if required as per suitability and submit before all chief of banks during the meeting itself to expedite the process of identification of bad bankers. It is the time that RBI distinguish good bankers from those bad bankers who always give excuses like bad monsoon or global recession or RBI policy or interest pressure, natural calamities to conceal the ill motivated lending resorted by them and their flatterers.

I know you will not like to respond to my request due to various reasons. Still I have decided to seek information through Email before I seek information under Right to Information act covering wider areas of corruption in Public Sector Banks.

I am however hopeful that RBI will take my letter in good spirit and take decision to seek such reports from all nationalized banks to ascertain the level of corruption prevalent in PS banks, lobby led promotion and posting, role of recommendation at various level diluting the concern for quality , frequent and repeated violation of promotion and transfer policies leading to several writs in courts, willful postponing of decisions in courts to perpetuate rule of injustice , quantum of money spent in getting favourable justice at the cost of bank staff just to fulfill individual ego of top officials, quality of vigilance system in bank and so on.

If there is a will there is a way. If the reports attached to my letter appear to be beneficial and useful RBI must work in this line or devise its own format to get more fruitful and effective result.

Thanking you

yours faithfully

Danendra

				Report No. 1
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Branches where percentage of Total Non Performing Assets (NPA)
	Out of Total advances is more than 10% and upto 25%
A	B	C	D	E	F	G	H
SL	Name of Branch	Total	Total	Percentage of	Name of Branch	Whether any of person	Name of Regional Head
NO.	With	Advance	NPA	NPA in column C	Manager who worked	in column E has been	Who recommended
	Date of opening	Ason	Ason	out of Total	in this Branch	Promoted during	for posting as BM &
		30.06.2011	30.06.2011	Advances in	During last 5 years	Last 5 years,If yes	for posting for Higher
				column B		Give Name	Scale
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
	Note: Disciplinary action taken against any of BM or Regioan Head may be mentioned if any in column no H
	Report 2
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Branches where percentage of Total Non Performing Assets (NPA)
	Out of Total advances is more than 25% upto 50%
A	B	C	D	E	F	G	H
SL	Name of Branch	Total	Total	Percentage of	Name of Branch	Whether any of person	Name of Regional Head
NO.	With	Advance	NPA	NPA in column C	Manager who worked	in column E has been	Who recommended
	Date of opening	Ason	Ason	out of Total	in this Branch	Promoted during	for posting as BM &
		30.06.2011	30.06.2011	Advances in	During last 10 years	Last 10 years,If yes	for posting for Higher
				column B		Give Name	Scale
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
	Note: Disciplinary action taken against any of BM or Regioan Head may be mentioned if any in column no H
				Report No. 3
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Branches where percentage of Total Non Performing Assets (NPA)
	Out of Total advances is more than 50%
A	B	C	D	E	F	G	H
SL	Name of Branch	Total	Total	Percentage of	Name of Branch	Whether any of person	Name of Regional Head
NO.	With	Advance	NPA	NPA in column C	Manager who worked	in column E has been	Who recommended
	Date of opening	Ason	Ason	out of Total	in this Branch	Promoted during	for posting as BM &
		30.06.2011	30.06.2011	Advances in	During since	Last 10 years,If yes	for posting for Higher
				column B	Opening of Branch	Give Name	Scale
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
	Note: Disciplinary action taken against any of BM or Regioan Head may be mentioned if any in column no H
				Report No. 4
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Officers who have not served in Rural Areas for two years and more before their last promotion
	Annexure of this report ::::Similar second report on officers who have not worked for two years and more in their entire service
A	B	C	D	E	F	G	H
SL	Officers in Scale II	Officers in Scale III	Officers in Scale IV	Officers in Scale V	Officers in Scale VI	Officers in Scale VII	Reason for Such
NO.							Promotion
							in violation of
							Rural posting policy
							of the government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
	Report 5
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Officers who have been served Charge Sheet / faced disciplinary action/against whom CBI inquiry initiated during last 20 years
	Number of times such action taken and brief note on whether he was acquitted or he was punished
A	B	C	D	E	F	G	H
SL	Officers in Scale II	Officers in Scale III	Officers in Scale IV	Officers in Scale V	Officers in Scale VI	Officers in Scale VII	Reason for Such
NO.							Promotion
							in violation of
							Rural posting policy
							of the government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
				Report No. 6
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Officers who have been directly recruited from a campus in following scale
	even though number of good officers of much talent , experience,and satisfactory reports are available in bank
A	B	C	D	E	F	G	H
SL	Officers in Scale II	Officers in Scale III	Officers in Scale IV	Officers in Scale V	Officers in Scale VI	Officers in Scale VII	Reason for Such
NO.							Promotion
							in violation of
							Rural posting policy
							of the government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
				Report No. 7
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Officers who have not been given any promotion during last 20 years
	Similar Report for 15 years , 10 yeas and 5 years (exclude officers who have voluntarily on health ground opted not to get promotion)
A	B	C	D	E	F	G	H
SL	Officers in Scale II	Officers in Scale III	Officers in Scale IV	Officers in Scale V	Officers in Scale VI	Officers in Scale VII	Reason for Such
NO.							Promotion
							in violation of
							Rural posting policy
							of the government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
				Report No. 8
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on NPA or Stressed or Restructured Accounts where Outstanding dues are equal to or more than
A	B	C	D	E	F	G	H
SL	Rs.5.00 lacs	Rs.10.00 lacs	Rs.50 lacs	Rs.5.00 crores	Rs.50.00 crores	Rs.100 crores	Remarks / action taken
NO.							Status
	Name of Borrower with	Name of Borrower with	Name of Borrower with	Name of Borrower with	Name of Borrower with	Name of Borrower with	court case filed
	Year when the a/c was first	Year when the a/c was first	Year when the a/c was first	Year when the a/c was first	Year when the a/c was first	Year when the a/c was first	SARFASIA action taken
	declared as NPA	declared as NPA	declared as NPA	declared as NPA	declared as NPA	declared as NPA	Accountability fixed
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
	Report 9
	Name of Bank
	Name of State
	Name of Region or Circle
	Year wise Report on Borrowers whose account was first identified or classified or treated as NPA
	(Year of first sanction should be reported in bracket )(In the first stage such report is to be for amount more than 50.00 lacs only)
A	B	C	D	E	F	G	H
SL	31.03.2008	31.03.2009	31.03.2009	31.03.2010	31.03.2011	30.06.2011	Remarks / action taken
NO.							Status
	Name of Borrower	Name of Borrower	Name of Borrower	Name of Borrower	Name of Borrower	Name of Borrower	court case filed
							SARFASIA action taken
							Accountability fixed
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
				Report No. 10
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on NPA borrowers with outstanding dues more than Rs.50.00 lacs
	This report should give the name of officers who recommended, sanctioned or ratified sanction of limit in last five years for each big borrowers in report no. 9
A	B	C	D	E	F	G	H
SL	Name of officer who	Name of officer who	Name of officer who	Name of officer who	Name of officer who	Name of officer who	Remarks / action taken
NO.	first recommended or	recommended or renewed	recommended or renewed	recommended or renewed	recommended or renewed	recommended or renewed	Status
	first sanctioned loan to	reviewed the loan in the	reviewed the loan in the	reviewed the loan in the	reviewed the loan in the	reviewed the loan in the	court case filed
	such NPA borrowers as on	Year 2010	Year 2009	Year 2008	Year 2007	Year 2007	SARFASIA action taken
	30.06.2011						Accountability fixed
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------
				Report No. 11
	Name of Bank
	Name of State
	Name of Region or Circle
	Report on Officers or Branch Managers or Regional Heads whose name appears two or more times in report no. 10
	Name of such officers should be divided in following colums as per number of years Account remained in Good Health just before it was treated as NPA
A	B	C	D	E	F	G	H
SL	NPA accounts	NPA accounts	NPA accounts	NPA accounts	NPA accounts	NPA accounts	Remarks / action taken
NO.	remained in good health	remained in good health	remained in good health	remained in good health	remained in good health	remained in good health	Status
							court case filed
	For 1 year	For 2 years	For 3 years	For 4 years	For 5 years	For More than 5 years	SARFASIA action taken
							Accountability fixed
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
And so on -------