Tuesday, December 23, 2014

Account for the lapses in PSBs

The problem of NPAs continues to be underestimated without any serious thinking on disciplining the banks and the borrowers is what is highlighted in the editorial.The banks balance sheets are window dressed to such an extent that no one can really figure out what is the real strength of our banking system. Ever greening of NPAs is an established practice and restructuring of  bad loans is nothing but an official version of ever greening with the blessings of even RBI.The write off of loans resorted to and the addition of NPAs on a recurring basis has been unfortunately absorbed by the accretion of deposits and addition to capital subscription by the Government using tax payers money.Though the death knell of banks is already sounded with ever increasing of bad loans,the tendency to ignore the problem both by the Government and RBI as the depositors and other stake holders bear the brunt cannot go on for ever as public awareness is on the increase and they will start questioning openly and the authorities will be constrained to account for the lapses.

Dr.T.V.Gopalakrishnan

(This  appeared in  Business line dated 26/12/2014)

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