When person like me Say that game of fraud and manipulation is the key of success in banks and all government offices, it is treated as sign of negativity. Now positive minded persons are slowly and gradually accepting the bitter truth that top officials who were proud for their banks and who used to claim or who used to make promises of becoming number one in banking industry in three to five years were real bluff masters,real manipulators and cheaters with investors, with bank staff and bank customers.
Newspaper link given here will throw adequate light on this bitter truth. RBI set committee has accepted the ground reality of public sector banks.
Media men and veteran economists who are flatterer of ministers and that of Congress Party ,who boast of having best knowledge of economics and who used to predict best future of banks to give a boost to stock prices of banks during last five to ten years will now be exposed.
READ the news items published today and submitted below carefullly.
This is also the views of media , not mine.
I may simply add here that actual of dimension of sickness in state run banks is many times more than what is projected in newspaper and TV media.
RBI or Government of India cannot cure the sickness until they understand the real dimension of sickness, repercussion of growing sickness on other sectors as well as on survival of banks and root causes of the sickness.
If the causes identified as reason of sickness or as symptom of future sickness are wrong and ill motivated , the dignosis prescribed by doctors sitting in RBI and GOI will also fail to arrest growing sickness, rather add fuel to fire.
Real causes are not global recession or high interest rate regime or natural calamities.
Persons who were assigned the duties and responsibilities of framing right policies , executing the policy in right spirit and regulating and monitoring banks to prevent and mitigate risks failed to provide desired safety to banks only because most of them acted as puppet in hands of powerful ministers and powerful politicians.
Trade union leaders in banking industry who were supposed to protect banks and protect the interest of bank staff also thought it better to work in tune with corrupt top bank officials to earn name, fame and wealth .
Top ranked Bank officials and Chief Executive officers of various banks who were given unbridled powers in the name of reformation used the power not to serve the common men and not to safeguard bank's interest but to flatter and win the hearts of ministers and powerful politicians so that they themselves become rich and powerful in the society of High profile people totally neglecting the basic banking business for which banks were nationalised in 1969.
Haman Resource Development Department of various Bank ignored the basic tenets of empowerment of workforce,recognition of performing bank staff,basic principles of natural justice to staff who devotedly perform employees and value of experience of employees working in the bank.They promoted nothing but flattery and bribery culture .Mismanagement of top officials during last five to ten years have only resulted in growing quantum of bad assets.Still they prefer young officers who do not have experience of banking and without any hesitation humiliate experienced senior officials and bank staff.
Last but not the least politicians left no stone upturned to exploit banks to serve their self interest and to expand their vote banks.Sometimes they promoted loan Mela culture and some other time they promoted loan waiver culture to please their voters which in turned adversely affected the culture of bank employees.
Unfortunately even Mr. Janardhan Pujari who propagated the theory of mass loan disbursement through loan melas and Mr.V P Singh and Devi Lal who advocated loan waivers as a tool to please voters failed to protect even their political career for long , not to speak of protecting the interest of common men , interest of bank staff and health of banks and that of government of India as a whole.
Now leaders of the country have to think , investigate , analyse and ascertain the pros and cons of three periods of banks, Pre -nationlisation, post nationlisation and post reformation.Then only they can plan the future course of action which will be best suited for Indian banks and Indian people.
You may now express your valued opinion on following news items if you so like on following email address
Restructuring of advances affecting ‘credibility’ of banking system
(Collected from the Newspaper Hindu Business Line )
The credibility of the Indian banking system is at stake. This is due to the perception that a significant portion of restructured standard advances are actually impaired or will turn bad, according to a top central bank official.
Gross non-performing assets ratio (GNPAs) was hitherto the main financial ratio to gauge the level of impairment in the banking sector assets. But this is now being complemented with the ratio of restructured standard advances to gross advances as a measure of latent impairment of the banking sector’s financial assets.
“This is in view of the perception by some of the market players that a significant portion of these standard advances are actually impaired or will turn non-performing with passage of time. The credibility of the Indian banking system is at stake,” said B. Mahapatra, Executive Director, Reserve Bank of India.
There has been an extraordinary rise in the level of restructured ‘standard’ assets. These assets surpassed the quantum of gross NPAs of the banking sector, he said at a seminar organised by the Centre for Advanced Financial Research and Learning.
As on March-end 2012, the restructured standard advances of the banking system stood at Rs 2,18,068 crore (Rs 1,06,859 crore as on March-end 2011) while the gross NPAs stood at Rs 1,37,102 crore (Rs 94,088 crore).
The latest Financial Stability Report of the RBI estimated that 15 per cent of restructured loans may turn bad while the working group to review the existing prudential guidelines on restructuring of advances took a more conservative view under a stressful scenario and estimated that 25-30 per cent of such loans may slip into non-performing category.
|Loan recast: Banking system credibility at stake: RBI|
(collected from Business Standard )
|Mahapatra committee observes extraordinary rise in restructured assets|
|BS Reporter / Mumbai Sep 14, 2012, 00:07 ISTWith debt recasts rising substantially over the past two years and a major part of such loans threatening to slip to the non-performing category, Indian banks’ credibility will be at stake in case of a latter scenario, the Reserve Bank of India said on Thursday.|
The central bank said market participants were using the proportion of restructured standard advances to gross advances as an indicator to measure the stress on banks and there was a perception that a significant portion of these assets would turn into non-performing assets (NPA).
“The gross NPA ratio, hitherto the main financial ratio to gauge the level of impairment in the banking sector’s assets, is now being complemented with the ratio of restructured standard advances to gross advances as a measure of latent impairment of financial assets,” said B Mahapatra, executive director of RBI, at a seminar organised by CAFRAL on Thursday.
“This is in view of the perception by some market players that a significant portion of these standard advances are actually impaired or will turn non-performing with passage of time.
The credibility of the Indian banking system is at stake.” Mahapatra was the head of an RBI-appointed committee on debt recast and had proposed stringent norms for such loans.
A loan is restructured by banks if a borrower faces difficulty in repaying. If a standard advance is restructured, then except for a few categories such as commercial real estate and personal loans, banks can continue to classify the asset as standard even after the recast.
Since asset classification is downgraded following the debt recast, banks need to make lower provisioning.
If an asset become sub-standard or non-performing, banks need to have higher provisioning, which hurts their bottom line.
However, banks are now criticised for using the debt recast tool to defer the inevitable, that is, restructuring a loan which does not have the potential of becoming a regular one.
“The working group (Mahapatra committee) observed that there has been an extraordinary rise in the level of restructured ‘standard’ assets, even surpassing the quantum of gross NPA of the banking sector,” he said.
As at-end March 2012, while the gross NPA of Indian banks were Rs1.37 lakh crore, restructuring was to the tune of Rs2.18 lakh crore. It its report, the Mahapatra committee had suggested all restructured assets would have to classified as NPA. The panel had suggested abolition of the forbearance after two years and in the interim, increasing the standard asset provisioning requirement to five per cent from the present two per cent.