Asset quality problems ravage PSU bank earnings
The 11 state-owned banks that have declared their earnings have seen their combined gross NPAs jump 46.8%
Banking shares (PSU) likely to fall
Within
a few days and a few months banks will publish their
financial results for the half year, for the quarter ending December
2010 and finally for the year 2010-11.One or two banks in Public sector will
adopt online technology to declare their actual bad assets which were hitherto
willfully concealed by corrupt executives of the bank and which was indirectly
supported by ED and CMD of all banks. But result of a few banks will be enough
to indicate the extent of sickness growing in Public sector banks.
RBI
and government of India will no more be able to make excuse of global recession
or bad monsoon for level of Non Performing Assets (NPA) reaching to alarming
position. They cannot save their face when NPA level in banks is doubled or
tripled in coming half years. Times has come when media men, rating agencies
and financial analyst as also Chartered Accountants will be exposed because it
is they who are depicting banks as shining and growing .
Now it is the duty of Banking Division, RBI, CBI, Vigilance Department and all
other controlling offices to identify the corrupt executives in such banks who
promoted culture of gift ( cash and king ) based lending, gift based promotion
and gift based banking. Only the officers who flattered big bosses, earned money
through bribe and shared with bosses and indulged in reckless lending could get
better posting and timely promotion. Branch Head who could earn
money through bribe in lending could bribe government officers to mobilize
bulk deposit could be elevated to higher and higher level superseding all
talented and devoted honest officers.
Now the time has come when government should
prepare a list of executives (at least Regional Heads or Circle boss or Zonal
heads) of banks who has contributed maximum NPA and whose ill-motivated
management, negligence and deficient monitoring caused loss to bank. To begin
with, banks should submit a list of CM, AGM, DGM and GMs who contributed bad
assets amounting to more than ten crores in a region. Similarly a list of those
branch heads who added more than five crores as NPA in a branch during last
three years should be prepared to identify the most corrupt officers of bank.
This list will prove that only those officers who made bad advances or only
those were indulged in corruption are sitting in top position of that bank and
hence no improvement could take place anywhere in that bank.
Now –a-days bank
officers need not be bothered of monitoring of their core assets as much as
they need to be bothered of polishing of their bosses. Culture of flattery
which was prevalent in all other government offices before banking reformation
(since 1991) has taken strong roots in banking too. Now the position of banks
has become so much critical that even its survival is at stake.
Who is to blame for such chaotic deterioration of health of PSU banks in
general and a few bank in particular where CEO of bank is considered as Star
Performer is a million dollar question.
God only knows the reason for such devastating erosion in moral values of
bankers.
But flattery culture is one of the biggest reason for mess in all government
offices , banks and insurance companies.
When government itself is formed by corrupt means, one cannot dream of good
culture in the administration at any level and one cannot imagine of shining
India at ground level.
Now it is the duty of Banking Division, RBI, CBI, Vigilance Department and all other controlling offices to identify the corrupt executives in such banks who promoted culture of gift ( cash and king ) based lending, gift based promotion and gift based banking. Only the officers who flattered big bosses, earned money through bribe and shared with bosses and indulged in reckless lending could get better posting and timely promotion. Branch Head who could earn money through bribe in lending could bribe government officers to mobilize bulk deposit could be elevated to higher and higher level superseding all talented and devoted honest officers.
Now the time has come when government should prepare a list of executives (at least Regional Heads or Circle boss or Zonal heads) of banks who has contributed maximum NPA and whose ill-motivated management, negligence and deficient monitoring caused loss to bank. To begin with, banks should submit a list of CM, AGM, DGM and GMs who contributed bad assets amounting to more than ten crores in a region. Similarly a list of those branch heads who added more than five crores as NPA in a branch during last three years should be prepared to identify the most corrupt officers of bank. This list will prove that only those officers who made bad advances or only those were indulged in corruption are sitting in top position of that bank and hence no improvement could take place anywhere in that bank.
Who is to blame for such chaotic deterioration of health of PSU banks in general and a few bank in particular where CEO of bank is considered as Star Performer is a million dollar question.
God only knows the reason for such devastating erosion in moral values of bankers.
But flattery culture is one of the biggest reason for mess in all government offices , banks and insurance companies.
When government itself is formed by corrupt means, one cannot dream of good culture in the administration at any level and one cannot imagine of shining India at ground level.
2nd Letter of 30th October 2010 is submitted below
In the quarter ended June
2010 Indian Bank posted unexpected spurt in NPA, in the quarter September 2010
banks like U Co bank, Vijaya bank and Union bank has exhibited unparallel
growth in NPA and in coming quarter many more banks will follow the same way to
register addition of maximum hidden bad assets in NPA portfolio to include
their bank in the list of worst (hitherto called as best ) performing banks.
Government in USA realized the guilt after much damage and Obama openly admitted that banking culture in USA was not as good as it was portrayed by financial experts. Similarly Indian government will also realize after losing lacs of crores in NPA and when most of the banks will face survival crisis. Already government of India has infused lacs of crores as capital in PSU banks to keep them healthy during last one decade.
Now CMD of the bank which has shown abnormal fall in profit and abnormal increase in Non Performing Assets (NPA) should introspect and assess policy of allowing recruitment of direct officers in scale II,III and scale IV and even scale V or VI superseding and humiliating several working officers who have been devotedly working in the bank for last two three decades but who are not having any God father to ensure promotion and good posting .Such high profile CMD and ED should get the work of existing executives assessed from unbiased honest team of officers of other banks and also ascertain how much NPA has been added by existing team of executives only due to their malicious intention. The outcome of such inquiry will make it clear that selection of executives was wrong and judgment of such executives is naturally always ill motivated and against the interest of the bank. Top executives are mostly indulged in corrupt practices and hence there is no doubt that stinking and polluted water is flowing from the top. They allow lending , purchase of goods and services or allow and contractual work only when they get their due share .
It is top officials who have inculcated bad practices in the bank and are mainly responsible and punishable for wide spread frustration and depression in officer community. Employees in general are not interested to give their all to the bank. They think it better to keep patience till the corrupt lobby is exposed or kicked out. “Na Nau Man Ghee Hota Hai Aur Na Radha Nachti Hai” this is why entire talk of growth of Bank appears Bakwas to the banker who works at ground level.
In conclusion one can say comfortably that Nav Nirman is the mask of such Bank but the real story is entirely different. Without stopping flattery culture and without punishing corrupt officer and without stopping corrupt tradition of promoting flatterers using Interview powers, one can change the hoardings, banners, posters but cannot imagine of real reformation. Bank can exhibit lesser percentage of NPA by making bulk advances to corporate but ultimately slow poison of rising NPA will puncture entire strategy of manipulation and expose the real health in near future. Of course it will be too late then and real culprits and gang of General Managers and Deputy General Managers of that bank will get peaceful retirement from the bank leaving behind bank fighting for survival like Satyam Computers. Employees working in Satyam Computers and clients associated with the company are slowly leaving the company and new connections are very limited and that too for short period. Once image is lost, it is hard to regain it and very much difficult to rejuvenate dormant employees.
However, even now, If bank’s big bosses are still not ready to accept their guilt, bank should prepare a list of Regional Heads and rank their performance on the basis of total amount of NPA they have added during last three year or five years. Regional Head who contributed maximum NPA should be ranked as number one star performer as per tradition of the Bank. Gold medal should be given to the Regional Head who has contributed maximum NPA in last one decade. Even those officers who indulged in reckless lending and now retired from the bank but whose advances became NPA should be given some extra incentive like double of pension or gifted some golden jewel. It is difficult to make a list of corrupt officers because there is no proof written or verbal to establish the charges of corruption. Birds of same feather flock together. It is therefore better to award those officers whose contribution in rise in bad assets is considerably good.
Hitherto officers mobilizing maximum deposits were treated as Star Performers even though they indulged in bad quality of lending. Now the time has come to identify officers who contributed maximum NPA. Time has come to identify Top ten Regional Heads whose selection of BM and whose ‘Kabile Tarif’ management helped in addition of maximum NPA in the bank .Gold medal should be given to those Branch Manager who have contributed maximum NPA in shortest span of time and also to those BMs who have a track record of generating NPA in branches. Special prize should be given to BM (and regional head) who has produced crores of NPA in one year to three years of opening of Branch. Human Resource Department should now find out the name of such officers advances made by whom have mostly become bad. Bank should peep into each NPA account to find out maker of such advance and prepare a list of such executives existing or retired which can precipitate the name of executives and Branch Managers who have contributed maximum bad assets to bank.
Similarly list of Branch Heads (scale wise and regional wise) should be prepared to know the top one hundred Branch Head who contributed maximum amount of NPA during the period under review. These top performers should then be promoted to higher scale as per whims of CMD or ED of the bank because they are the real adventurer and they can do whatever instruction is given by GM or by orders on phone. Such star performers can only arrange costly gifts for bosses and government top officials to tap handsome deposits.
Regional Heads, zonal Heads or General Managers or ED or CMD who had selected above hundred Branch Heads (who contributed maximum NPA) should now be awarded with golden gifts and cash prize and promoted to higher scale and made ED. Because such officers contributed their best in making it possible for the bank to become number one in banking industry at least on the parameter called as “growth of NPA”
Government in USA realized the guilt after much damage and Obama openly admitted that banking culture in USA was not as good as it was portrayed by financial experts. Similarly Indian government will also realize after losing lacs of crores in NPA and when most of the banks will face survival crisis. Already government of India has infused lacs of crores as capital in PSU banks to keep them healthy during last one decade.
Now CMD of the bank which has shown abnormal fall in profit and abnormal increase in Non Performing Assets (NPA) should introspect and assess policy of allowing recruitment of direct officers in scale II,III and scale IV and even scale V or VI superseding and humiliating several working officers who have been devotedly working in the bank for last two three decades but who are not having any God father to ensure promotion and good posting .Such high profile CMD and ED should get the work of existing executives assessed from unbiased honest team of officers of other banks and also ascertain how much NPA has been added by existing team of executives only due to their malicious intention. The outcome of such inquiry will make it clear that selection of executives was wrong and judgment of such executives is naturally always ill motivated and against the interest of the bank. Top executives are mostly indulged in corrupt practices and hence there is no doubt that stinking and polluted water is flowing from the top. They allow lending , purchase of goods and services or allow and contractual work only when they get their due share .
It is top officials who have inculcated bad practices in the bank and are mainly responsible and punishable for wide spread frustration and depression in officer community. Employees in general are not interested to give their all to the bank. They think it better to keep patience till the corrupt lobby is exposed or kicked out. “Na Nau Man Ghee Hota Hai Aur Na Radha Nachti Hai” this is why entire talk of growth of Bank appears Bakwas to the banker who works at ground level.
In conclusion one can say comfortably that Nav Nirman is the mask of such Bank but the real story is entirely different. Without stopping flattery culture and without punishing corrupt officer and without stopping corrupt tradition of promoting flatterers using Interview powers, one can change the hoardings, banners, posters but cannot imagine of real reformation. Bank can exhibit lesser percentage of NPA by making bulk advances to corporate but ultimately slow poison of rising NPA will puncture entire strategy of manipulation and expose the real health in near future. Of course it will be too late then and real culprits and gang of General Managers and Deputy General Managers of that bank will get peaceful retirement from the bank leaving behind bank fighting for survival like Satyam Computers. Employees working in Satyam Computers and clients associated with the company are slowly leaving the company and new connections are very limited and that too for short period. Once image is lost, it is hard to regain it and very much difficult to rejuvenate dormant employees.
However, even now, If bank’s big bosses are still not ready to accept their guilt, bank should prepare a list of Regional Heads and rank their performance on the basis of total amount of NPA they have added during last three year or five years. Regional Head who contributed maximum NPA should be ranked as number one star performer as per tradition of the Bank. Gold medal should be given to the Regional Head who has contributed maximum NPA in last one decade. Even those officers who indulged in reckless lending and now retired from the bank but whose advances became NPA should be given some extra incentive like double of pension or gifted some golden jewel. It is difficult to make a list of corrupt officers because there is no proof written or verbal to establish the charges of corruption. Birds of same feather flock together. It is therefore better to award those officers whose contribution in rise in bad assets is considerably good.
Hitherto officers mobilizing maximum deposits were treated as Star Performers even though they indulged in bad quality of lending. Now the time has come to identify officers who contributed maximum NPA. Time has come to identify Top ten Regional Heads whose selection of BM and whose ‘Kabile Tarif’ management helped in addition of maximum NPA in the bank .Gold medal should be given to those Branch Manager who have contributed maximum NPA in shortest span of time and also to those BMs who have a track record of generating NPA in branches. Special prize should be given to BM (and regional head) who has produced crores of NPA in one year to three years of opening of Branch. Human Resource Department should now find out the name of such officers advances made by whom have mostly become bad. Bank should peep into each NPA account to find out maker of such advance and prepare a list of such executives existing or retired which can precipitate the name of executives and Branch Managers who have contributed maximum bad assets to bank.
Similarly list of Branch Heads (scale wise and regional wise) should be prepared to know the top one hundred Branch Head who contributed maximum amount of NPA during the period under review. These top performers should then be promoted to higher scale as per whims of CMD or ED of the bank because they are the real adventurer and they can do whatever instruction is given by GM or by orders on phone. Such star performers can only arrange costly gifts for bosses and government top officials to tap handsome deposits.
Regional Heads, zonal Heads or General Managers or ED or CMD who had selected above hundred Branch Heads (who contributed maximum NPA) should now be awarded with golden gifts and cash prize and promoted to higher scale and made ED. Because such officers contributed their best in making it possible for the bank to become number one in banking industry at least on the parameter called as “growth of NPA”
Similarly RBI should make a list of star performer CMDs and EDs who helped in excellent rise in NPA in their bank. Another angle of consideration may be number of unhappy employees, unhappy customers and growth in number of cases and complaints against the bank. The more employees are unhappy, the more customers are unhappy and the more complaints are lodged against the bank the best will be CMD or ED of that bank compared to other banks. At least they can manage certificate of excellence on all parameters which RBI desire to have on record to save their skin.
31st October 2010
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