This refers to quarterly result of a few PS banks booking lesser profit and greater NPA in quarter ended December 2014 compared to past quarters. Keeping in view NPA position of banks, , CMD of Andhra Bank has also expressed his opinion candidly in an interview that position of banks is not likely to improve very soon and Achhe Din are yet to come. His has to retire very soon and hence some clarity has come out.As long as top officials are in service , their one and only one duty is to please ministers willingly or unwillingly.
They promise every quarter that bank's Balance Sheet will improve from next quarter as Previous Prime Minister Mr. Manmohan Singh used to say on price rise issue. When people used to cry on rising price, he used to tell them that situation will ease from next quarter. He used to dilute the intensity of angry people by saying that economy of the country is in control and in good condition and all possible efforts are being taken to contain rising prices.
Similarly in Public sector banks, Non Performing Assets has been rising every quarter and it will continue to rise quarter after quarter. And after bad quarterly result, CMD of each bank says that bad debts will be contained from next quarter and soon they will improve.
In one quarter they somehow or the other manage the data but in next quarter they declare some bad debts. This hide and seek policy has been in play since long. In every quarter , some bank will declare bad debts and book lesser profit or loss and in next quarter some other bank will book greater profit and improvement in NPA position. This vicious circle will never end. NPA of PS banks have crossed two lac crore in March 2014 and will undoubtedly cross 5 lac crore in March 2016 if RBI does not change the policy of NPA and that of restructuring to please Crying CMDs and to please Modi Sarkar who are building pressure for more and more lending .
In my view , no power on earth can stop rising trend in NPA without manipulation or without changing the norms of NPA. I have been of this view for last several years and I may be termed as negative minded by extremely positive minded person or by Yesman of the system. But sooner or the later reality precipitates and surfaces out in open.
We have seen the fate of many banks in the past , not only weak banks but also so called strong banks. I do not blame United Bank or Uco Bank or Central Bank or Allahabad Bank, Indian Bank or Indian Oversea Bank. Even banks considered as strong banks like SBI, PNB, Union, Oriental bank are gradually exposing their hidden sins. A bank used to be strong not because of inherent quality asset but due to clever mind of top officials of that bank who had so many fraudulent tools to conceal bad assets quarter after quarter. This is why , many times bad result comes out only after retirement of a Clever CMD. This has happened in SBI, PNB, Union Bank, Oriental, United , Central Bank, Indian Bank , IOB , Vijya Bank and other banks so many times.
Unfortunately neither RBI nor Ministry of Finance ever took the trouble to know why and how a CMD conceals Bad debts and how another declares it after former retires . Even if some audit is carried out for doing some SHOW business, the auditors is so chosen that he or she submits favourable report or the bad report if submitted is put under carpet to save top officials of the bank who have very excellent relation with top RBI officials or politicians. System has been bad since long. It is not that a few top officials are corrupt , but the corrupt officers at top post one after other has damaged the entire system and there is none to change the system. Now corruption has become the system and the culture of the bank. Good officers in such case avoid taking promotion or taking higher responsibility and bank thus run by mostly bad officers or inexperienced officers.
The reign of flatterers and bribe earners is not going to end as long as drastic steps are not taken to correct the culture from its source , from its origin and until a few from each bank are punished ,irrespective of the fact that he is in service or retired. Message of good or bad governance percolates down from top and not goes up from bottom. Unfortunately for every fault of top officials or ministers , blame goes to juniors and sometimes to middle management officials who had little role either in sanction of loan or in monitoring of loan or in account turning bad.
It is bad luck that inspecting, auditing, vigilance and all Regulating agencies are birds of same feather and hence they all avoid taking any punitive action against erring officials and try to pass the time or postpone taking decision on files related to corrupt officials. Actions are taken against some officers who do not have any Godfather backing him. There is deep rooted and strong unity among bad officials in all organisations specially in banks where good officials treat it better to keep mum and remain away from mainstream
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