Existing Banking Systems in India vs Basel III Recommendations

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AT LEAST RBI HAS NOW UNDERSTOOD THE FUTURE RISK OF BANK AND ABOVE STEPS WILL MOST PROBABLY HELP IN SURVIVAL OF BANKS FOR A LONGER PERIOD. BUT THE MILLION DOLLAR QUESTION IS WHERE FROM SUCH HUGE AMOUNT OF CAPITAL WILL COME? AND ANOTHER QUESTION IS WHETHER POLITICIANS WILL STOP EXPLOITATION OF BANKS FOR THEIR POLITICAL GAIN? WHETHER GOVERNMENT BANKS WILL STOP SANCTION OF LOANS AND THEN WRITING OFF OF LOANS TO PLEASE POLITICIANS ? WHETHER PROMOTION OF BANK OFFICIALS WILL CONTINUE TO BE BASED ON FLATTERY AND BRIBERY?

FUTURE OF PUBLIC SECTOR BANKS WILL DEPEND ON WHETHER THEY ARE ABLE TO KEEP THEIR CUSTOMERS AND STAFF HAPPY. CUSTOMERS ARE UNHAPPY WITH THE SERVICE THEY GET FROM STAFF OF THESE BANKS AND STAFFS ARE UNHAPPY BECAUSE THEY ARE THE LEAST PAID AND THEIR CAREER HAS BEEN SPOILT BY CORRUPT TEAM OF OFFICERS IN NEXUS WITH POLITICIANS. STAFF CANNOT EXPECT SATISFACTORY WAGE REVISION IN XTH BIPARTITE SETTLEMENT DUE IN NOVEMBER 2012 ANS THEY WILL BE CHEATED BY MINISTERS, IBA AND UNION LEADERS AS THEY WERE CHEATED IN THE YEAR 2007.POLITICIANS WILL MAKE ALL EFFORTS TO PRODUCE EROSION IN PROFITS OF THESE BANKS AND THEY BUILD PRESSURE ON BANKERS TO LINK WAGE REVISION WITH PROFITABILITY OF BANKS.

GROWTH OF DEPOSITS AND ADVANCES WILL COME DOWN YEAR AFTER YEAR, PROFITABILITY WILL FACE EROSION DUE TO BAD QUALITY OF ADVANCES AND NON RECOVERY OF LOANS FROM DEFAULTERS DUE TO INEFFICIENT LEGAL SYSTEM.

QUANTUM OF NPA ON THE OTHER HAND WILL GROW YEAR AFTER YEAR BECAUSE QUALITY OF LENDER IS NOT SO GOOD. OFFICERS WHO ARE GREEDY AND WHO EARN MONEY THROUGH BRIBE AND SHARE WITH BOSSES ARE GIVEN THE POWER OF LENDING.
BRIBE BASED ADVANCES WILL DO NOTHING BUT ADD TO PORTFOLIO OF BAD ASSETS.

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PROVISION HAS ALREADY EATEN THE CAPITAL OF ALL BANKS AND IT IS WELL KNOWN FACT THAT GOVERNMENT HAS INFUSED CAPITAL INTO GOVERNMENT BANKS MANY TIMES IN THE PAST . UNFORTUNATELY BANKS IS TOO WEAK TO MAKE ADEQUATE PROVISIONS EVEN FOR TERMINAL BENEFITS PAYABLE TO THEIR STAFF . THIS IS WHY IN THE YEAR 2010 BANK MANAGEMENT FRAUDULENTLY AND ILLEGALLY RECOVERED LACS OF RUPEES FROM THE ARREARS PAID TO STAFF TO COMPENSATE THE 2ND OPTION OF PENSION ALLOWED BY THEM. MANY WRITS ARE PENDING IN VARIOUS HIGH COURTS FILED BY AGGRIEVED EMPLOYEES IN WANT OF JUSTICE.

LAST BUT NOT THE LEAST ,GOVERNMENT IS FINANCIALLY TOO WEAK TO INFUSE CAPITAL TO THE TUNE OF 1.5 LAC CRORES IN A SPAN OF COMING SIX YEARS AS ENVISAGED IN RBI PLAN AND NARRATED ABOVE NEWS ITEM.. FISCAL DEFICIT IS GROWING FASTLY AND HAS BECOME OUT OF CONTROL. SOVEREIGN RATING HAS BEEN DOWNGRADED. TRADE DEFICIT IS INCREASING DUE TO RISE IN IMPORTS AND FALL IN EXPORTS. CORPORATE SECTOR IS UNHAPPY WITH INDECISIVENESS OF THE GOVERNMENT. REFORMATION LAUNCHED IN 1991 HAS BECOME VICTIM OF POLITICAL GAME PLAYED BY POLITICIANS IN THE NAME OF COALITION POLITICS. PRECIOUS TIME OF PARLIAMENT IS WASTED IN MUTUAL BLAME GAME IN POLITICS.

WHEREFROM BUSINESS WILL GROW , HOW INVESTMENT WILL GROW AND HOW GDP WILL INCREASE ARE SOME FUNDAMENTAL QUESTIONS WHICH ECONOMISTS AND RBI PEOPLE SHOULD UNDERLINE BEFORE SETTING A ROAD MAP FOR BANKERS TO STICK TO BASLE III RECOMMENDATION?
IT IS UNDENIABLY BITTER TRUTH OF INDIAN ECONOMY THAT THEY ARE UNABLE TO CONTAIN INFLATION AND PRICE RISE AND THEY HAVE PROVED TOTALLY FAILURE IN STOPPING CORRUPTION AND

NEPOTISM IN ADMINISTRATION AS ALSO IN POLITICS. THEY HAVE ON THE CONTRARY BOOSTED UP THE FUTURE OF NAXAL AND TERROR ACTIVITIES.

ONLY GOD MAY SAVE US.t