If SBI also dare speak the truth and if SBI shows courage to book all bad assets as NPA , I think it will break all records and book maximum loss and create another history in banking industry. I think loss booked by SBI and total volume of NPA will not be less than aggregate of all PUS banks. It all depends on honesty of banks in identification of assets and recognition of income as per RBI norms.
No power can stop public sector banks moving from bad to worse even in coming years .
Officers from top to bottom at powerful positions are birds of the same feather.They think more for their welfare on priority and less for bank they are associated with.
Unfortunatley and strategically good officers are always posted by these clever top officials at critical places so that their voice is unheard and they loss their stamina to fight against corrupt officials and corrupt politicians.
Politicians add fuel to fire and they leave no stone unturned to damage health of banks..They also think for their vote bank and use banks as milching cow for their family and friends. None of them think for good of Banks. They are more often than not, selfish and corrupt.
NPA as such will continue to rise and rise. Politicians and top bank officials will always make promises to correct the health in forthcoming quarters. They are master in delivery of lectures in seminars and before media. But this will never happen that health of banks will start improving .
We have been witnessing continued deterioration in health of banks for last three decades. Only manipulation and fraudulent methods are used to show banks as shining. Unless and until , purification starts from top and from their heart, I at least cannot imagine of improvement in health of banks or any fall in bad assets in near future .
Respected Sri Vinod Rai will almost fail in its target of cleaning and improving the health of ailing banks in the system he is supposed to work.
While in audit, he used to submit report on sickness, iregularities, frauds and scams. But now he has to rectify them and to stop them which is not as easy as it is visualised by Government of India. . It is a hard nut to crack because political leaders as well as bank officers are concerned more with their career and their position in power and in wealth and least bothered about health of banks and that of economy.
RBI Governor Mr. Raghuram Rajan has been making his best efforts to clean banks. But politicians will not allow him to move as freely as he wishes. Further it is not always good to say spade a spade.
It is also true that It is RBI which failed in discharging its duty to regulate public banks. In seventies and eighties , RBI officials used to inspect branches of various banks and there used to be a fear in the minds of bankers. Since 1991 , in the name of freedom, in the name of reformation , in the name of privatisation and lierlisation , RBI has left everything free and Bhagwan Bharose.
After losing all, RBI has come to senses in last one year or so and only 150 bad accounts pinpointed by RBI has brought almost all banks in red. You may imagine what will happen if all loan accounts are honestly scanned and categorised in appropriate category by bankers. 30 to 40 percent of advances will be found in the category of NPA. And governmnt will be left with only one alternative , that is to provide capital to save its image.
Banks are happy that they buy Certificate of Good Health from Team of Chartered Accountants every year. And Government is Happy that they get certificate of good health of banks from Chief of each bank. Let people of India suffer and taxpayer bear the brunt of their corrupt and ill-motivated moves.
WE did not take lesson from Satyam Computer fraud, from Harshad Mehta or Ketan Parikh scam and neither from ever increasing cases of frauds and misappropriation of bank's fund.
Financials Indicate True Health Of Banks ?
But the fact is that no improvement has actually taken place at ground level during last three decades in culture of lending , in position of recovery and in habit of negligence in monitoring in PSU banks. Situation has rather been deteriorating year after after. Top ranked Officers who are clever in manipulating balance sheet come out with shining balance sheet and get elevation through their mentor Ministers and RBI officials. But sooner or the later, in some quarter or the other , each bank has to book bad results and make false promises that they will deal with problems and try to reduce stressed assets in forthcoming quarters.
In fact ,Officials are in general busy in falsely glorifying their bosses. A Branch Manager glorifies a Regional Head, RH glorify Zonal Head , General Managers glorify ED and CMD and finally CMDs are busy in glorifying Finance Ministers and RBI officials. Most of them are fittest Yesman than real performers. They are good speakers to hypnotise ministers and bank staff both. They are more loyal to their sources of wealth and power than to their bank.
Bank Officials take care of their bosses more than thier banks. They are loyal to their bosses and their clients who make them richer and powerful . They in general do not take care of quality of loans they disburse and do not bother of monitoring loans sanctioned by their prdecessors or in matter of recovery of dues from bank loan defaulters. They are more often than not, busy in extending red carpet welcome to their bosses, their CMD, ED and other senior officials to earn their blessings, to cover up their evil works in lending and finally to get quickest promotion and choice transfers . They learn the art of gifting and polishing auditors for getting a certificate of good health of loan accounts in their bank.
Officals who are not apt in flattery and not expert in earning bribe are languishing in insignificant and critical places . Inefficient officials in general are ruling over efficient officials. Inexperienced are ruling over experiened ofgicers. Majority of branches of each Bank is headed by either corrupt officers or inefficient officials or these branches are facing acute shortage of staff or they are working under prssure of higher bosses or local mafiamen. It is always easier for them to compromise quality to survive in the corrupt system than to assert their knowledge and values.
For real change, Vinod Rai will have to work personally for a bank for years and then only he will be in a position to understnad ground reality. It is easy to make good policies but it is difficult to execute them in true spirit.
A day will come when FM and PM as also BBB will accept the truth and then they will take more effective steps to brighten future of banks.
I have full faith in leadership, caliber and talent of Mr Narendra Modi Prime Minister of India and his team associated with the task of cleaning these banks. I have full faith in ability , knowledge,potential and capability of sri Raghuram Rajan rbi governor.
I hope ,sooner or the later, thing will improve because they all are sincerely working on it.
Click Here To Read How CMD And ED are Selected And Officers Are Promoted
Also Read This blog
For the full fiscal year ending March 2016, the bank posted a record loss of Rs 5067 crore.
The bank set aside Rs 6,857 crore as provisions, up 3.5 times from the Rs 1,817 crore in March 2015. Provisions included Rs 1,564 crore for pension liabilities and Rs 300 crore for NPAs in the bank's branches in UAE.
Gross NPAs increased to 9.99% from 3.72% and in actual terms crossed the Rs 40,500 crore mark up from Rs 16,261 crore in March 2015.
Gross NPAs of the bank doubled to Rs 20,907 crore from Rs 10,265 crore it reported last fiscal.
Total provisions more than doubled to Rs 2,283 crore compared with Rs 1,018 crore a year ago hitting profit.
This is the second consecutive quarterly loss for the lender after the RBI directed banks to recognise some loans particularly linked to the infrastructure and metal sectors as NPAs.
The bank's gross NPA ratio rose to 9.76% from 6.40% in the preceding quarter and 5.46% a year ago. In absolute terms, gross NPAs rose to Rs 15,385 crore at the end of March from 8,358 crore a year back.
Union Bank of India
Central Bank of India
Bank reported Rs 898.04 crore loss as gross NPAs doubled and provisions rose four times to Rs 2,287 crore from Rs 617 crore a year ago.
This bank slumped to a loss of Rs 326 crore in the quarter ended March 2016 compared to a net profit of Rs 56 crore a year ago. Gross bad loans almost doubled to Rs 8,560 crore versus 4,393 crore a year ago.
Gross NPAs as a percentage of advances rose to 6.64 per cent from 4.32 per cent in December quarter. Similarly, the net NPA ratio for the March quarter was up 4.61 per cent.
Provisioning during fiscal 2016 rose 62 per cent to Rs 1,390.51 crore from Rs 859.13 crore in the previous year.
For the year-ended March 2016, Vijaya Bank posted a net profit of Rs 381.80 crore, down 13 per cent, over Rs 439.41 crore in the corresponding period last year.
Bank has posted a 59 per cent drop in its net profit to Rs 84.5 crore for the quarter ended March, from Rs 206.1 crore in the corresponding quarter last year.
The bank’s gross non-performing assets (NPAs) rose to Rs 8,827 crore, from Rs 5,670.4 crore.
In percentage terms, it rose to nearly 6.6 per cent, from 4.4 per cent a year ago.
Net NPA rose to Rs 5,419.4 crore from Rs 3,146.9 crore. In percentage terms, it was increased to 4.20 per cent from 2.50 per cent.
If all loan accounts are audited by RBI ,one may very well imagine the fate of these banks, one may also understand the gravity of sickness in banks and at least realise now how much Congress party had already damaged during decades of their misrule.
Biggst bank ,SBI will declare result on 27th of this month. You may imagine how much painful the result of SBI in fourth quarter will be if they too follow in true spirit the advice given by RBI Governor Mr. Raghuram Rajan regarding asset quality of top 150 accounts audited by them.. I have no doubt that SBI will leave other banks far behind in matter of loss and Gross NPA and break all records of the past.
SBI has delayed maximum in publishing results only because they are perhaps busy in manipulating figures so that damage is reduced to best possible extent. But in the long run, they will also have to come out with correct figures on losses, provisons and NPAs.
Some other banks have also cleverly and fraudulently managed to save their image by making lesser provisions for bad assets and booked little profit fraudulently just to save their falsely brightened career from damage.
Finance Minister Mr. Arun Jaitley and RBI Governor Mr. Rajan are still in dark about real volume of stressed assets . They are unable to visualise the volume of pain hidden in bank's books of accounts. NPA may grow from 5 to 50 percentage if all banks shows true honesty in saying spade a spade, in rcognisiing and identifying bad assets strictly as per RBI prudential norms.. Still they have huge volume of bad and stressed assets hidden in disguise as standard assets so that lesser provision is necessitated..
I would like to mention here that neither media men nor court interferered anytime during last years and decades in the matters related to lending decisions and in decisions related to writing off of bad loans or in arriving at settlment with bad borrowers. Bankers and political leaders are to be held responsible for all lapses and evil works which has resulted in erosion of health of PSU Banks.
Banks have rather enjoyed absolute freedom in sanction of loans and in wirting ff of bad loans. Politicians exrt pressure from top , but they do not burn their fingers by giving written instructions to do this or do that. Political masters advice Chiefs of banks on phone what a bank has to do and what not to do. Similarly bosses of banks give verbal instructions to their subordinates.
Vinod Rai also knows that politiicans of this country are beyond control . He knows that vote bank politics of ruling or opposing parties cannot be stopped. That is why he advices total blindness towards ongoing corrupt culture. Actually our country has witnessed various scams causing loss to the tune of thousand and lacs of crores of rupees to country and hence loss arising due to bad debts amounting to 10 or 20 lac crore by PSU banks appears very small amunt to Mr. Vinod Rai and to government necessitating action against erring officials and politicians.
FM suggests merger and consolidation of banks. In my view , merger is not at all a solution to problem of bad assets. Merger will simply change the shape of banks and bring its name in list of top banks of the world. But it cannot change the quality of lending and quality of human resources running these banks. It cannot stop politicians exploiting banks for vote bank and it cannot stop them for serving interest of their kith and kin, friends and relatives.
FM talks of consolidation of PSU banks on the one hand and on the other they are giving license to Payment banks, differentiated banks, Post bank and other small banks or big bank . This inconsistency in their policy has created more confusion than eliminating it or reducing it . They are dreaming of big bank by merging smaller banks so that the new enitty may be reckoned in top 100 banks of the world . But the fact is that when management of banks is unable to manage small banks , how will they manage big banks is a million dollar question.
Some of VIPs in government plead for higher packages for executives to make them more loyal . But they do not like to say why government school teachers do not teach though their pay package is greater than that of their counterpart in private schools. Teaching in private schools is far better than that in public schools though government spend huge amount of money on education every year.
I fully disagree with his views .
Rather I like to ask Mr.Jaitley whom should we ask questions on why assets with more than 20 lac crores are stressed, why lacs of crores of good money is sacrificed to please defaulters.
Media and courts were in deep slumber till case of Mallya came in public domain and it is only due to their intervention after exposure of Kingfisher default, rightly or wrongly, that government is now appearing as serious to contain sickness of banks and appear to be interested to recover money from at least wilful defaulters declared by banks themselves.
Bank chiefs will not be questioned over NPA resolution decisions: Rai---Hindu Business Line
One in every 3 PSU banks has stressed assets higher than net worth-LiveMint 25.05.2016
Economic Times 25th May 2016
The reaction of the media, parliamentarians and courts ended up weakening banks, the finance minister said. "Some of us in our bonafide enthusiasm are doing exactly the opposite. The media will make a business loss look like a scam when it is not. MPs will demand 'recall all loans' not realising that economic activity will come to a standstill. And the courts will take over the management of NPAs. Now, as a result of these three factors, we bring unfair pressure on executives of banks who coul ..
Bankers always blame interest rate for worsening asset quality or blaming global recession for rise in bad debts or requesting RBI to reduce Repo rate , reduce CRR or pay interest on CRR to earn profit.
Board Bureau chief Vinod Rai says it's time for mergers