Enriching defaulters

This is with reference to the editorial, ‘Devil in the detail’ (February 20). The sale of assets to ARCs has been a grey area , since haircuts up to 40 per cent of asset values were allowed and defaulting borrowers took to buying their assets from ARCs at a discount. In the process, ARCs receive a portion of the profits and borrowers, through benami bidders, get back their assets at a deep discount. At the end of the day, banks end up with losses. The sweat and blood of bank employees are siphoned off to enrich defaulting borrowers.

Banks have enough expertise and experience to lend and recover loans. In the case of PSBs, it is the Government that directs lendings. Defunct policies and scams in major sectors like telecom, coal and power ultimately turned these assets sour.

When ARCs can sell the assets and also increase their bottom line, banks can do so too. Stringent laws and punishment for wilful default will give teeth to the recovery of bad loans.

S Veeraraghavan

Coimbatore

Sad loans

We’re not yet over the bad loan syndrome. The survey on credit monitoring practices in Indian banks makes interesting revelations. Banks are not making full use of technology to monitor recovery techniques.

The top challenges are inadequacy of data, non-availability of a skilled workforce and/or underutilisation of the skilled. The management is unable to utilise those who are conversant with procedures, and give them proper postings and incentives for performance. This is so in most PSBs.

The situation will only worsen as seniors retire. The prediction that establishing a bad loan bank will push back the recovery of loans is not far from the truth. While processing loan applications, there should also be an independent study to check out possibilities of manipulation. An early warning system and timely action may avert bad loans to some extent.

TSN Rao

Bhimavaram, Andhra Pradesh

The resilient Amby

The story of the Ambassador (‘Ode to the Ambassador’ by Sumeet Chatterjee, February 17) is in many ways that of the Indian economy prior to reforms — unpretentious, basic and without ambition. Yet, its acceptance was so complete that there was little need to bring in variants to the basic model. The car’s USP was the low cost of repairs and spares being available in the corner shop. When the dies in its assembly line aged, resulting in a gap between the boot and the body, customers didn’t flinch at the thicker rubber beading that covered it.

Post liberalisation, even as Maruti 800 invaded the market, the Amby did not lose its clientele. It could have opted to upgrade its technology and looks, yet for some reason it never did. Much like the Detroit car companies that failed to hold their own against the tech savvy vehicles from Japan and S Korea, the Amby had to yield sooner than later. It is to its credit that it could carry on for two more decades, to retire only now.

Ambition, foresight to embrace new technology, and innovation are key drivers to growth and brand value. The Maruti stable has pursued this axiom with success.

R Narayanan

Ghaziabad, Uttar Pradesh

Not sporting

This refers to the apprehension raised by sportspersons belonging to the associate banks of the SBI. These concerns appear to be genuine. The bank which once shopped for the best sports talent in the country and had champions such as Ajit Wadekar, GR Vishwanath, Syed Kirmani, Mohd Azharuddin, Roger Binny (cricket), Syed Ali, Muneer Sait, CS Poonacha (hockey), CR Anand, GK Vishwanath (table tennis) and Arjun Devaiah (athletics), to name only a few, on its rolls, has now chosen to give the cold shoulder to sportspersons.

The embargo on sports recruitment has resulted in players past their prime continuing to don the bank’s colours and this has reflected on performance. The bank would do well to not only retain the sports teams post-merger but also continue with enlarging its talent pool by blooding youngsters.

NJ Ravi Chander

Bengaluru

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