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NPAs are growing and the issue is becoming increasingly critical. The performance and quality of banking officials has deteriorated, and the whole nation is influenced by a few selfish corporate houses who are able to manipulate government policies.
PSBs must overhaul the boards of companies that do not return loans. Most companies seem to assume that if the loans are not returned, they will eventually be written off. There appears to be a high level of exchange of favours between banks and corporate houses, apart from misutilisation of scarce capital. Family members being appointed to boards have compounded the problem.
PK Chaudhuri
Banking is based on trust and personal relations. Traditional bankers with inbuilt skills, which business schools do not teach, are good at assessing borrowers. Capacity, capital and character have been given the go-by in the anxiety to expand the size of balance sheets. Unscrupulous borrowers are equipped with the latest technologies to get their projects financed.
Innovation is welcome, but safety and trust are the core ingredients. Lending does not end with disbursement of loans; the risk and responsibility start from day one since only continuous surveillance can build up quality assets. Bankers know that any unsolicited loan will turn sour.
The winding up of the mobile wallet of Snapdeal is an example of how business models without an ear on the ground can fail. Hence, the real problem with banks is not lack of skill, but lack of focus on things like independent business decisions without external influence, sound HR policies and updated infrastructure. Banks cannot afford to share their profits with fintech companies, but should become competitive.
S Veeraraghavan
Coimbatore
If bankers who have lent, and ARCs are not comfortable with and sure of recovery, what can a new institution do differently? At present we have about 15 ARCs to exclusively handle the bad loans surfacing in the banking sector.
The idea of setting up a bad bank for NPAs crops up regularly. It is high time this issue of housing all the bad loans of PSBs in one bank is settled in a way that suits the holistic approach of the Indian economy and not just the banks.
RS Raghavan
Bengaluru
Rail reforms
When Suresh Prabhu was made railway minister expectations ran high. But now the PMO has voiced displeasure at the functioning of the railways. It is also a sign that the PM is adopting a zero-tolerance attitude towards rail safety in the context of three major rail accidents in the space of three months. Prabhu is still Modi’s best chance to reform the railways but he needs to devote less time on cosmetic changes and ensure the pace of work picks up across railway zones and divisions. Perhaps, it is time the Government entrusted the job of track-laying to private infra companies. One of the recommendations of the Debroy Committee on railway reforms was to introduce competition in the sector.
KS Jayatheertha
Bengaluru
Major achievement
The herculean task of moving the 228-year-old Tipu Armoury is all set to be accomplished thanks to the marvel of modern technology and the efforts put in by the Archaeological Survey of India and Indian Railways. The translocation of the heritage structure and protected monument which housed the musketry and feared arsenal of the Tiger of Mysore is the first of its kind in the country and has obviously attracted the attention of heritage buffs and conservationists.
The rock solid armoury said to be one of the eight built by Tipu Sultan is a much-revered work of military architecture, built with lime and stone mortar, using a processed mixture of eggs with shells, jaggery, and soap nut. It is a wonderful gesture on the part of the authorities to preserve a piece of history, albeit at a cost, besides paving the way for the doubling the railway line between Bengaluru and the royal city.
NJ Ravi Chander
Bengaluru
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