Stressed loans

The issue of concealing stress by evergreening loans has been there for long. But if has been flagged by no less than the RBI Governor, it means that it has become a serious issue encompassing the entire banking industry. And if the rosy picture of robust performance of the banking industry during the FY23 is in any way, even partly, due to the window dressing or evergreening of accounts by banks, it would be a time bomb waiting to blow up anytime.

Evergreening of large accounts especially would conceal the potential non-performing assets amounting to postponing the stress and encourages borrowers to follow devious methods to hide the realities of their sinking businesses. As the regulator is now aware of certain “governance gaps in banks”, it should not confine itself to highlighting the problem, but should crack the whip and take the errant banks to task, probably impose heavy penalties, at the earliest.

Else, the future may reveal that the Indian banking industry has its own Silicon Valley Bank or a Signature Bank or a Credit Suisse, for different reasons like concealment of stressed loans or diversion of funds. The RBI needs to act before it is too late.

Kosaraju Chandramouli

Hyderabad

Banks’ performance

This refers to ‘Banking on numbers’ (May 30). Banks, while lending, are always suspicious about window dressing in their customers’ balance sheets but if they end up practising it themselves, then it is unfortunate and unfathomable.

Banks have overcome the huge non-performing asset issues of the past but if these robust results are due to window dressing then it needs to be avoided going ahead and a clear-cut direction must go from the RBI to all the bank boards.

Banks should provide returns to their stakeholders but not at the cost of concealing real facts and showing a superficial picture to them.

Banks should rather show gradual and steady returns to their investors than indulge in wrong practices to take on competitors.

Bal Govind

Noida

Trained manpower

As the business of banking is dependent on public trust, any dilution of trust in governance of banks can harm the financial system. Banks as well as the RBI need adequate number of trained personnel to perform their mandated functions.

Human resource development to meet expanding responsibilities continues to be a badly neglected area, particularly in public sector banks and government-run institutions.

MG Warrier

Mumbai

Navigation satellite

This refers to ‘ISRO successfully launches GSLV-F12’ (May 30).

The Indian Space Research Organisation (ISRO) has successfully launched a second generation navigation satellite, NVS-01.

This would augment the country’s regional navigation system, providing accurate and real-time navigation.

This would ensure the continuity of NavIC (Navigation with Indian Constellation) services — an Indian regional satellite navigation system, similar to the GPS, providing accurate and real-time navigation.

While this success came after the GSLV F10 ‘debacle’ in 2021, corrections in cryogenic stage and lessons learnt have really paid off. Significantly, it is for the first time that an indigenously developed rubidium atomic clock has been used as the scientists earlier opted for imported ones to determine date and location.

N Sadhasiva Reddy

Washington, US

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