The
editorial reads well and carries lot of messages to banks, borrowers
and RBI. NPAs are basically created by the banks board, banks' officials
and borrowers and as such the prevention of formation of NPAs should
begin before and after the sanction of loans. There are several
abinitio NPAs in several banks as loans get sanctioned by the Board
without any sort of detailed inquiries due to certain obvious
reasons.The present approach of RBI can only help to camouflage NPAs
officially and will be an exercise in futility involving additional
expenditure, time and cumbersome procedures. The ideal solution is to
introduce some penalty for erring banks and borrowers and the funds thus
generated can be a cover in case NPAs do figure after continuous
monitoring , follow up and supervision on an ongoing process.
Dr.T.V.Gopalakrishnan
(This comment is in response to the editorial " A stitch in banking time" that appeared on 27/12/13)
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