The Banks need to be highly professional

Apropos your editorial Banking on good faith (The Hindu dated 27/1/2017), the credibility of borrowers from PSBs in particular has been fast eroding thanks to the accumulation of bad debts and inability of the enforcement mechanism to recover the banks’ dues. The reasons for such a state of affairs are not far to seek. The failure of professionalism in PSB’s boards in running the banks commercially, interference of politicians and bureaucrats in the banks’ functioning, laxity of supervision of banks by the Reserve Bank, lack of involvement by the Chambers of commerce and Industry in disciplining their members in the proper conduct of banks loans which are nothing but depositors’ money  and tax payers’ ignorance that they are subsidizing the huge bad debts and consequent losses and inability to voice their concerns have all contributed in weakening the banks and the erosion of trust in the entire governance system. In this background, the arrests by the Central Bureau of Investigation of former IDBI officials and some of the borrowed Company’s officials are well intended and have definitely sent a warning signal both to the erring officials of banks and bad borrowers as well. However, this cannot be considered as adequate unless and until the key figure behind the corporate Mr Vijay Mallya is booked and made accountable for all the  banks dues and they are fully recovered. Of course, this sort of severe action should not make bankers wary of extending credit as the economy is very badly in need of huge investments for its all round growth and the banks are already flooded with funds due to the demonetization effect. Banks’ business is to lend and expand economy and this has to go on professionally covering the risks commercially and profitably benefiting all the stake holders of the economy Viz; the Government, the banks, the depositors, tax payers, borrowers and public at large.  

 Dr T V Gopalakrishnan