Friday, October 14, 2011

RBI turns Heat on Banks to check Bad Loans

RBI turn heat on banks to check bad loans

"Latest News emerged from meeting of Finance Minister with CEOs of banks:-------State-owned banks have witnessed a surge in the level of bad assets (loans) or NPAs in recent times. The gross non-performing assets (NPA) of public sector banks stood at Rs 71,047 crore for the period ended March, 2011. A loan that stops earning interest after 90 days is defined as an NPA. .An estimated Rs 11,000 crore of funds are locked up with willful defaulters."

It is totally false and incorrect to say that amount involved with willful defaulters is only Rs.11000 crores . As per figure given by officials of public sector banks to RBI, it may be correct to say so. As a matter of fact total amount involved in willful defaulters is not less than ten times of it i.e. Rs.110000 crores. Similarly total amount of Non Performing Assets in banks is not less than two lacs crores as on 30, 09, 2011.

The fact is that wrong reporting is the tool which enables CEOs of banks to exhibit rosy picture before RBI and Ministry of Finance and get promotions and good posting. Flattery and bribery has spoilt the banking industry specially banks in public sector .Wrong reporting starts from field level under guidance from top level officials. It is fortunate or unfortunate that now banks have adopted CBS technology and RBI is constrained under public pressure to insist system generated figure for NPA from all government banks.

RBI also uses to accept whatever information is provided to it by PSB officials. None of regulating officials wants to present bad picture and inclined to take credit from ministers for good performance even if it requires false reporting. If true picture is discovered through RTI act, the evil works of bankers and regulating agencies will be exposed.

It is pity that even officials of various rating agencies are managed by officials by bribe to give favourable and attractive ratings. CVC, CBI and all internal or external auditors are managed. The whole thing is that “sabse bara rupaiya” Bribe and Gift are able to manage all.

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