Why the banks suffer and bad borrowers thrive?

The bad  debts problem is because of the following.1) Banks boards are not professional. Mostly the Directors  are political appointees without any background knowledge of banking ,finance, economics.etc.2) RBI and Banks do not have the autonomy they deserve. They have to dance to the tunes of politicians and corrupt bureaucrats They are not able to perform their responsibilities without fear or favour and they have to oblige the bureaucrats, politicians and tolerate all types of interferences from the Government  3) The borrowers are not disciplined and encouraged to do all unethical business practices . They dictate terms to banks instead of banks dictating terms to them. Bad borrowers in particular expect cross subsidisation of their interest dues  and  bring in all possible pressures on banks . Banks simply oblige and get continuously harassed for lower interest rates, evergreening of loans by compelling for release of fresh loans etc to service their interest and instalment dues. 4) The Accountants and Auditors are not honest to their profession and do not report the correct position of accounts in the balance sheets . They help corporates  to  hide more information Though they have all the information about the statutory defaults they either do not report or report incorrectly. They seldom verify banks dues and how they conduct banks loans.. Less said the better about their role in hiding the correct information from all authorities who matter. The Reserve Bank attempts to extract some hidden information through their inspection  and negotiation skills with banks managements and their auditors , but they are hand in glove with each other to project a better balance sheet. Window dressing of banks balance sheets is an open and accepted practice in banking and regulation of banking. 5) The representative bodies of Corporates like Indian Merchants Chamber, Chamber of Commerce and Industry, Federation of Indian Chamber of Commerce  and Industry , Exporters Association, Small Industries association etc make a hue and cry to curry favour from the Government and all institutions  and enjoy all possible concessions and reliefs,but seldom raise their voice against the bad conduct of their members in conducting the loan portfolio and not servicing and repaying of the loans,6) The Indian Banks Association the representative body of banks unfortunately have not been seen fighting for banks grievances against the borrowers or the Government or regulators etc. This Association can definitely do a lot in helping banks which suffer from bad behaviour of some bad borrowers, some corporates demanding high rates of interests on their deposits and lower interest rates on the loans, corrupt practices often experienced in the appointment of Senior Executives in banks etc 7) The Regulators have to often swallow the insults because of certain behaviours and interventions in their functioning. 8) Lack of Coordination among the Regulators to achieve the common Objective of keeping the Financial System strong and healthy is a major cause for banks and corporates poor financial performance.. How to take care of these issues should be the approach of the Government to make the banks healthy and strong. Without a strong banking system the expected GDP growth of 8% and above will amount to chasing a mirage involving heavy expenditure and avoidable cross subsidisation of all wrong things..

Dr T V Gopalakrishnan  .   .