T.V.Gopalakrishnan (mumbai)
26 Apr, 2011 08:38 AMThe problem of NPAs exists as long as banks deal with money and people. As it is, there is erosion of values and ethics in the system. Corruption and fraud have become part and parcel of business deals. In thi background, prudence demands that there should be a built in mechanism to contain the problem of NPAs involving individual borrowers and making them accountable. General provision and specific provision towards NPAs only affect the other stake holders of banks other than bad borrowers,of banks and such there should be a mechanism to penalise the defaulting borrowers on an ongoing basis for which the creation of Precautionary Margin Reserve Fund taking a small levy from bad borrowers based on their conduct of transactions with the banks is the only permanent solution for the perrennial problem of NPAs. Will the authorities care for such solution?.
Appeared in Economic Times e-paper-http://economictimes.indiatimes.com/usrmailcomment.cms?msid=8086930&usrmail=gopalakrishnan.tv@gmail.com&mailon_commented=1
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