Tuesday, May 6, 2014

Bad debts affect investments

The losers because of NPAs in banks are Investors, depositors, shareholders,general customers of banks, employees and general tax payers in the economy. The beneficiaries are borrowers, corrupt offcials, lawyers, directors of banks, auditorrs, regulators and some directors of banks.The loss on account of bad debts is substatial to the economy and this has been an organised loot.Though borrowers and banks need to be disciplined and this is posssible with some simple mechanism by rating the Standard assets and levyibg a penalty on the potential bad  borrowers and banks for their failure to discipline the bad borrwers, no serious attempt has been made as there are many vested interests in  having bad debts and write offs.  

Dr.T.V.Gopalakrishnan

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