RBI , Banks, RTI and Inspection Reports.

 

RBI RTI and Inspection Reports.

The banks suffer from bad borrowers and the entire economy, the people, investors, depositors of banks,general customers and the Government bear the brunt as the banks' contribution to the accrual of the economy and benefits to the society get nullified because of the bad debts. From this angle, there is nothing wrong if banks in their own interest make it public the list of bad borrowers and perhaps the reasons for bad debts , the difficulties in recovering the bad debts including the legal hurdles and other pressures. The losses that banks incur directly and indirectly because of the bad debts can also be brought to public notice if needed. The release of inspection  report can perhaps be made selective in such a manner that the trust  based on which banks function should not  be disturbed. Definitely public should know as to how banks misuse the depositors funds and where they fail to deliver because of lack of professionalism and accountability  and mismanagement of public funds. It is time for RBI to revisit and take a review of the Inspection Reports and make it clear as to what is to be released under RTI Act and what is  not to be released to protect the so called fiduciary responsibilities. The function of Banking is  unique and it cannot be equated with other organisations and corporates.All said the misuse./ abuse of technology, failure in Governance standards to exploit fiduciary responsiblities etc need to be very closely monitored by RBI and public should get the feel that the banks function very safe and all the stake holders benefit with tangible results. The banks' balance sheets also should carry  in brief if possible the STRENGTHS and WEAKNESSES of Banks as indicated by RBI in its Inspection Reports. The Much needed TRUST in banks cannot be allowed to be eroded because of the avoidable transparency as per RTI act but at the same time the release of inspection findings to public in a selective manner should definitely pave way for enhancing the quality of borrowers and performance of banks. 

Dr TVG 

( This comment appeared slightly in a modified manner in the Business Standard Dated 20/7/21.    

RBI Governor says RBI will bring in Financial Inclusion Index.Is there any Mindset for bankers?

 

If Financial Inclusion has to be made a reality it should start from down trodden and vulnerable sections of the society. Class banking and keep the Customers away approach  presently pursued  by banks including PSU banks using / abusing technology to the most disadvantage of all categories of deposit customers in particular needs to be totally stopped. Customers should feel confident and trust the banks for any deals. The way customers are taken for a clean ride by the most sophisticated banks keep away even small customers from approaching banks for any deals. This reflects in the growth of NON Banking FIN companies dealing in Gold loans. Banks have forgotten Customer Service is a fact and there are no grievance Mechanisms whatsoever is a tragedy. In this background, Financial Inclusion can only generate problems for the Regulator as banks have never the feel of Customers and their survival depends on customers is merrily ignored or rather not understood. The expectations of the Governor that the banks would entertain the lowest category of the society though a very laudable objective are misplaced. High time RBI goes in for a survey among the people including those who need to be included under Financial Inclusion and decide ways and means to correct the banks first and then think of enrolling them for laudable objectives. Ground realities of late are gloomy. Financial Inclusion Index can come only if there is Financial Inclusion at ground level and bankers have a mindset to come to the rescue of the really deserving people from the lowest strata of society. Such bankers are yet to be made or invented.  

 

Dr T V G

 

July 16, 2021,

(This comment appeared in Business Standard dated 15th July 2021 ).