Tackling bad loans

| Updated on April 27, 2018 Published on April 27, 2018


With reference to the article ‘A treatment for the bad loan disease’ (April 27), let us understand that a bank’s balance sheet is only a reflection of the state of the economy today. If one takes into account the loan waivers agreed to in some States and demanded in some others, the stress in agri loans should be around ₹1.5 lakh crore (15-20 per cent of agri exposure). MSMEs always reported gross NPAs of 12-15 per cent.

With the cases of large borrowers now being resolved through the NCLT route, where financial creditors have the edge, MSMEs, as part of operational creditors, are likely to suffer more. This will have a further impact on banks’ MSME portfolio. So except retail (comprising mainly the consumer segment), high NPAs are seen across all sectors engaged in production. In retail also, the high level of GNPA in education loan (7.7 per cent, according to the IBA) is a big cause for concern not only for bankers, but the society as a whole, as it is a commentary on the job opportunities created for the younger generation to repay the loans. So, while cleaning up the banks’ balance sheets now, the treatment should be directed towards the stressed sectors as well.

V. Viswanathan


As far as public sector banks are concerned as long as politicians keep interfering in appointments of board directors and members and even pushing the case for loan to a specific borrower, nothing much will change irrespective of the system one puts in place.

Coming to skilling, there is a huge difference between balance sheet-based lending and project-specific or cash-flow-based lending. Specially in large-ticket loans for long gestation projects it is imperative that the whole project is assessed and its viability taken into account before sanctioning even one rupee for it. Accountability at all levels will have to be increased so that exchequer’s money is safeguarded and loans are given after all the possible risks are covered.

Bal Govind


Capital punishment for rape

The government is ready with another amendment to the Indian Penal Code and this time with regard to the quantum of punishment for sexual offences. Capital punishment is proposed for the rape of a child. However, the question of punishment comes only when the accused is prosecuted and convicted. Sexual offences take place in private where the victim is the only primary evidence. When a similar punishment is proposed for rape and murder, it will lead to increased incidents of murder after the sexual crime is committed as there is bleak possibility of prosecution of the criminal if there is no primary evidence. In short, the law need not be changed, the society needs to change.



Telecom pricing

The decision by TSDAT to bar operators with 30 per cent revenue share to indulge in predatory pricing has its pros and cons. While this will lead to an even playing-field for all operators and present a good business opportunity, it could hamper the social objective of making communication accessible to the marginal sections of society. Instead, the government could have a pricing mechanism for every region — for instance, different rates for tier 1 and tier 2 cities. This will not only serve the revenue objective but also help achieve the government’s social goals.

Vikram S


Fake spiritual gurus

Asaram Bapu, once an all powerful cult leader, is only the latest in a long list of ‘holy’ fraudsters to be convicted for crimes of a sexual nature. Jodhpur lawyer PC Solanki and his team must be applauded for their dogged fight for nearly five years against the might of his dark empire. These fake spiritual gurus are backed by politicians who, in turn, seek help to garner votes for them. Asaram joins the long list of imposters who ‘trapped’ vulnerable devotees in the garb of providing them spiritual solace and thus reaping benefits in many ways, including wealth.

J Akshay


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Published on April 27, 2018
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