Class Banking or Social Banking

Do you believe in saying that every bank under public sector has financed more than 50% of total advances of the bank to top 100 borrowers of that bank?

Banks in general are likely to face risk of concentration of credit in near future. Already lending under Aviation sector, textiles sector, real estates & builders, Micro Finance Institutes, Education Loans, power sector, electricity boards , diamond dealers are facing problems and slowly lending to Business giants like Kingfisher or Indian Airlines are NPA or the verge of NPA.

Ninety percent of  Total advances of banks are in the hands of 10% of borrowers and 10% of total advances are shared by 90% of borrowers.

Fifty percent of total Non Performing assets of the banks pertain to top 100 bad borrowers of each town and cities.

Will you believe in saying that more than half of executives of the banks have been found guilty of irregular lending or bribe based lending in their career but have been acquitted and junior level officers have been made scapegoat?

Will you believe that legal system and administrative system is still not as effective as it should be to deal will willful defaulters and corrupt bankers.?

Is it not true that waiver culture inculcated and propagated by dirty politicians for their vested interest has vitiated recovery culture in banks?

Do you know that lending to Priority Sector or to weaker section or to farmers have been consistently coming down in all banks and especially in public sector banks? 

will anyone believe in India tat stimulus package announced by government of India in the year 2009 after 2008 subprime crisis in USA has also contributed in situation going from bad to worse?

will anyone believe that reformation in banking initiated in 1991 has resulted in escalation of bad assets in banks?

will anyone believe that poor quality of bank staff and inadequate staff at key branches  has also contributed in sickness of banks?

But to meet the target set by RBI for lending to Priority Sector or to weaker sector or under agriculture sector , RBI and Government of India together have permitted banks to classify lending to rich class or to big borrowers as lending under Priority sector.

Banks were nationalized for making it accessible to weaker section of the society and to involve it in social banking but now they are transformed into profit making banks discarding the real goal of nationalization. Under the umbrella of reformation, Public sector banks are now interested more in top 10000 borrowers, roughly 500 to 1000 borrowers in each bank. 


Deposit made by crores of small depositors is given to hardly 10000 top businessmen of the country. When these high value advances goes bad , the blame will go to Global recession or bad weather or rise in interest rate .None of bankers are held accountable.

When mid size loan goes bad , junior or mid level officers are to face the music and when small value loans goes bad, government ask for waiver or write off or compromise with borrowers.No effort for inculcation of good culture in borrowers and lending officers.

When NPA goes beyond control of the bank, they are written off or sold to other companies. When capital adequacy ratio is affected adversely, government of India infuses fresh capital or FIs like LIC are motivated to purchase share of the bank to increase tier I capital. Ultimately entire burden goes on the shoulder of common men in way of tax or curtailment in subsidy to farmers.If profitability of banks is at stake due to rise in NPA , investors will have to face erosion in their money invested in shares of such banks. 

Finance to relatives of bank employees is known to all , but none in the country know how much of bank's total lending is given to relative of Ministers , central or state level ministers, or to relative to top ranked politicians. And how much of such loan is bad but no action has been initiated by bank in fear of repercussion. Lacs of cases are pending in courts of law for decades together against powerful persons but no effective action has ever been taken .

I would like to request RBI to collect information on following lines to understand the bitter truth and take remedial measures if systemic fault is established by such report.

  

1. Number with name of government banks with their number of branches in India. Out of these banks, how many have been working fully under Core Banking Solution and how many banks / branches are yet to complete CBS implementation.

2. Position of Total amount of bad assets called as Non Performing Assets or stressed asset or restructured asset vis-a -vis Total advances of each bank (bank wise) as on 31.12.2011. Please confirm whether the amount of total bad assets is calculated manually or it is generated by CBS system . Please also confirm that none of branches and none of banks have tampered with CBS system to hide bad assets during anytime last three years.

3. Number of Branches (bank wise) where total amount of NPA is more than 25% of total advances of the respective branches as on 31.12.2011 for all banks and for all regions separately

4. Number of branches (region wise for all banks) where total amount of Bad assets (NPA ,stressed Assets, restructured assets ) is more than 50% of total advances of the branches as on 31.12.2011.

5. Name of Regional Head and Name of Branch Manager where gross NPA is more than 50% of total advances. Name of CMD of the bank should also be mentioned. Similar information for Regional Rural Banks for each bank has to be given.

6. Action taken by bank management against officers, regional heads, branch managers, credit officers due to whose fault bad assets grew and reached a level of 50% and more compared to their total advances. (Please submit information bank wise and branch wise.)

7. If more than 25% of branches in any bank have more than 25% of total advances as NPA, what action has RBI or Ministry of Finance or CVC or CBI or internal IR section has taken against top officials like General Managers, Deputy General manager, Executive Directors, and Managing Directors.

 If more than 25% of government banks are sick of bad assets and if more than 25% of their branches have accumulated NPA to the extent of 25% of their total advances or 10% of their branches have accumulated more than 50% of their total advances in the branch, whether MOF of RBI has ever proposed punitive action against erring executives of banks,( retired or working now).

Is there any scope for review and revisit to policy of reformation?

Do you think that freedom given to bankers have resulted in deterioration in quality of lending?

Do you think that flattery based promotion has resulted in deterioration in quality of workforce and hence ill-motivated and inexperienced officers are made Branch Head or Regional Head of bank head?

Are auditors held responsible for faulty reporting in any bank for any case during last ten years?

Second Part:---------------------------------------------------

1. Total advance as on 31.12.2011  (Out of which total amount of NPA)

2. Number of accounts and amount where total funded and non funded exposure per individual / firm/group /company/MFI/Mutual fund is more than Rs.100 crores

3.  Number of accounts and amount where total funded and non funded exposure per individual / firm/group/MFI/company/ mutual fund  is more than Rs.10 crores but upto Rs.100 crores

4. Number of accounts and amount where total funded and non funded exposure per individual / firm/group/MFI/company/ mutual fund  is more than Rs.1 crores but upto Rs.10 crores

5. Number of accounts and amount where total funded and non funded exposure per individual / firm/group/MFI/company/ mutual fund  is  upto Rs.1 crores

6. Total number of account and amount of Non Performing Assets, Restructured Assets and stressed assets out of point no. 1

7. Total number of account and amount of Non Performing Assets, Restructured Assets and stressed assets out of point no. 2

8. Total number of account and amount of Non Performing Assets, Restructured Assets and stressed assets out of point no.3

9.  Total number of account and amount of Non Performing Assets, Restructured Assets and stressed assets out of point no.4

10. Total number of account and amount of Non Performing Assets, Restructured Assets and stressed assets out of point no.5

 11. Year wise amount of money sacrificed by each bank during last ten years in waiver of loan, compromise settlement and in writing off  of bad debts

12. Whether any to executive like Executive Director or CMD, or GM or DGM or AGM or CM has been punished for bad and mischievous management due to which bad assets grew to such a large extent as in SBI or many top performing banks. Unprecedented growth in quantum of NPA of top banks should open the eyes of RBI and MOF. 

Even statutory auditors failed to expose the reality .Has any action taken against erring auditors?

If yes please provide bank wise name of such punished officers during last ten years. There are many officers who caused hundreds of crores of rupees to their banks but have been allowed safe exit from the bank. or even promoted to higher position. Even investigating agencies like CBI or CVC ignored or closed such cases for some reason or the other. Have Statutory auditors, concurrent auditors and RBI auditors failed to prevent rise in NPA or stopping of concealment of bad assets?  If yes, do you like to take corrective step?

13. Amount lost by each bank on account of fraud and name of top officers punished for this during last ten years .Number of cases related to fraud  involving amount more than one crores of rupees pending for disposal for more than one year. Action taken to expedite disposal of fraud related cases and punishment to guilty officers within a timeframe of maximum one year. How do you ensure that each cases of fraud by staff is reported to RBI ?

14.  Last but not the least whether unmanageable growth in bad assets is always due to global recession or bad weather or interest hike as pretended by top executives of the banks.