Clever officials of public sector banks are silent on causes of bad debts. They do not want CBI inquiry to find out whether there was any corruption involved. They want that government should take over bad loans so that they may get fresh opportunity of earning bribe and costly gifts in lieu of fresh sanction of loans. If bad loans are takeover by Government or transferred to proposed National Asset Management company or sold to ARC, this will lead to bad culture and bankers will feel exonerated from all future charges and without any hesitation indulge in more and more corruption.
It is remarkable to point out here that after the introduction of loan waiver culture by politicians like Devi Lal and VP Singh and then perpetuated and promoted by all subsequent government , borrowers have willfully and strategically become careless in repayment of loans . Borrowers willfully delay in repayment in anticipation of loan waiver scheme by the government or settlement offer by management of bank. Borrowers with malicious intention of grabbing bank's money first turn defaulters and then pray for compromise and sacrifice.
Again it is good and desirable to point out here that businessmen whose trade promotes black money also willfully and intentionally evade tax payment in anticipation of Voluntary Income Disclosure scheme offer by the government.Once government start punishing tax defaulters and tax evaders , instance of tax evasion and creation of black money automatically get reduced. Once terror is pushed into the mind of evil doers , the habit of indulging in bad practices will end .
As long as government do not take stern action against erring borrowers, erring bankers , erring officials, erring businessmen , erring politicians and professionals, we may not dream of good governance and honest culture. People commit crime and wait for exoneration by manipulation. Honesty is no more a good policy.
Dishonesy, flattery and manipulatory tactics are the tools which helps in acquisition of power, money and social status which not only helps criminals getting rid of punishment but also ultimately lead to success at the cost of really good performers .
Dishonesy, flattery and manipulatory tactics are the tools which helps in acquisition of power, money and social status which not only helps criminals getting rid of punishment but also ultimately lead to success at the cost of really good performers .
Scam occurs in implementation of almost all schemes , all projects and all departmental works. Whenever scams are exposed, government change the name of policy , set up a committee to suggest new name of policy and finally exonerate all evil doers . Similarly bankers first created and accumulated bad loans and now when they are exposed the want government to takeover bad loans. They suggest government to absolve them from the lens of CBI and CVC.
I do not say all bad loans are due to evil intention of loan sanctioning officials .^There may be some cases of default due to genuine reasons too. But what I mean to say that whenever there is doubt of evil motivated loaning, there must be through investigation and if malicious intention is proved beyond doubt , the officials must be punished to teach lesson to others and to pave way for good governance.
I have no doubt in saying that present and decade long dirty culture rampant in banking and other government offices helps in further promotion of dirty culture. Therefore government will have to learn punishing evil doers. And once the punishment is awarded to evil doers, none will dare commit crime in future and good culture will replace bad culture for ever. I do not want to promote reign of terror but I want that good performers must be given due respect if India has to grow in real sense.
"There were some suggestions on setting up of 'National Asset Management Company'," financial services secretary GS Sandhu said after the pre-budget meeting with heads of banks and financial institutions with finance minister Arun Jaitley.
Bankers also asked the government to raise the exemption limit under Section 80C of the Income Tax Act from the current Rs. 1 lakh, which has remained unchanged for a decade and its real value has declined sharply.
"There was discussion on NPAs. There was also proposal for setting up of National Asset Management Company for improving the performance of DRTs (debt recovery tribunals) to collect loans," HSBC India country head Naina Lal Kidwai said after the two-and-half hour long meeting.
Suggestions were also made for strengthening of present SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) to ensure fast recovery of bad loans, she said.
Kotak Mahindra Bank managing director Uday Kotak said the government should consider listing of insurance behemoth LIC over the next few years. "Over the next few yeas the government should seriously consider listing of LIC. The kind of money government can raise by listing LIC is significant, it can fund financial needs of public sector banks as well as fiscal deficit," he said.
"This necessarily need not be in July Budget, but over the next few years. Listing of LIC may be a game changer in financial sector."
Public sector banks requested government for capital infusion and long-term instrument for financing infrastructure sector
Bankers seek bad loan takeover-Hindustan Times
India’s top financial sector executives on Tuesday asked the government to set up a national behemoth that would consolidate bad loans to clean up bank balance sheets, more tax breaks to encourage household savings and sale of stakes in Life Insurance Corp (LIC) by listing it on exchanges
"There were some suggestions on setting up of 'National Asset Management Company'," financial services secretary GS Sandhu said after the pre-budget meeting with heads of banks and financial institutions with finance minister Arun Jaitley.
Bankers also asked the government to raise the exemption limit under Section 80C of the Income Tax Act from the current Rs. 1 lakh, which has remained unchanged for a decade and its real value has declined sharply.
The proposed Asset Management Company will take over large non-performing assets (NPAs) of banks and help in reviving companies ridden with bad debts.
Gross NPAs — shorthand for loans that could turn bad — of Indian banks have soared from Rs. 69,000 crore in 2009 to an estimated Rs. 2.8 lakh crore as on March 31, 2014. Between October and March, an estimated Rs. 60,000 crore of bad assets — about 15-20% of overall NPAs of banks — came up for sale, which is almost four-times of last year’s level.
"There was discussion on NPAs. There was also proposal for setting up of National Asset Management Company for improving the performance of DRTs (debt recovery tribunals) to collect loans," HSBC India country head Naina Lal Kidwai said after the two-and-half hour long meeting.
Suggestions were also made for strengthening of present SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) to ensure fast recovery of bad loans, she said.
Kotak Mahindra Bank managing director Uday Kotak said the government should consider listing of insurance behemoth LIC over the next few years. "Over the next few yeas the government should seriously consider listing of LIC. The kind of money government can raise by listing LIC is significant, it can fund financial needs of public sector banks as well as fiscal deficit," he said.
"This necessarily need not be in July Budget, but over the next few years. Listing of LIC may be a game changer in financial sector."
Public sector banks requested government for capital infusion and long-term instrument for financing infrastructure sector
Once upon a time (before 1993), there used to be a saying: "Nationalisation of all losses and Privatisation of all profits". Now, we may add one more - "Nationalisation of all Bad Assets and Burying all Conspiracies, Corruption and Frauds in a deep pit".
ReplyDelete