The Hindu Business Line : Better banking

This is with reference to the editorial "Banking better" (Business Line, June 29). It is a good augury that the Indian banking system has come out of the trauma of NPAs. At last, the bankers have been able to grapple with the challenges of liberalisation.

The article rightly points out that a banker often takes a credit decision in the dark, usually without sound empirical data to rely on. Many of the credit decisions in regard to the ongoing projects may boomerang on the system. Meanwhile, the apex court's upholding the rights of lenders to enforce their securities to recover their loans is welcome.

In fact, the recovery process is prone to get entangled in legal disputes, many of them designed to postpone a decision or altogether avoid repayment of loans.

The initiatives taken recently by the Reserve Bank of India to formulate a credit information system will, it is hoped, increase information flow regarding the creditworthiness of the borrowers.

However, the individual bankers should scrupulously adhere to the discipline evolved by the Reserve Bank of India.

R. Devarajan

Noida

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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