The problem of NPAs has been basically due to poor monitoring of accounts by bankers is a fact which unfortunately does notget the attention it deserves.The internal rating of loan accounts right from the sanction of loans to the closure of loan accounts has not been scientifically carried out by the bankers giving rise to their deterioration and turning into npas over a period. The contacts with borrowers are not very regular and the bad conduct of accounts gets noticed only when payments do not come as per the NPA classification norms. Borrowers also know the shortcomings of banks and they have their own tricks to satisfy the banks although they know very well that they have problems in business. In the case of borrowers having multiple accounts the borrowers and banks join hands to ensure that the accounts do not get classified as NPAs although there are symptoms of sickness. In the case of large accounts, the identification of problems is easy but banks seldom want to dissatisfy the borrower.


 Dr.T.V.Gopalakrishnan

(This comment appeared in Business Line dated 9/7/12) in response to an article appeared in Business Line dated 8/7/12)