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Real Reformation Will Now begin in Government Sector Banks


Danendra Jain


After 43 years of bank’s nationalization and 21 years of adoption of policy of liberalization and reformation launched in the year 1991,our government and our learned Finance Minister has realized for the first time, the bad consequences of imposition of targets for deposit and advances on CMDs of banks. It is undoubtedly and undeniable true that due to unrealistic targets there used to be unbearable pressure from seniors on field functionaries for its achievement.

And due to application of evil ways and means to reach nearer to target and due to unhealthy competitions among flatterer officers in reaching nearer to bosses, officials of banks during last three to four decades have in general lost a lot of its health, accumulated unimaginable volume of bad assets, created a gang of inefficient, non performers but cleaver, flatterer and corrupt workforce and eventually caused huge loss to the bank as also to its culture.

These top ranked officers could get the top post only and mostly by indulging in window dressing during their posting at branches or in the regions and it is they who used to teach same window dressing to their juniors and award only those officers who were clever in following their line of action even at the cost of overall health of banks. It is they who taught juniors to compromise quality in lending as also in deposits.

Bank officers who could manage illegal money in sanction of loans or through illegal ways and means could pay bribe in acquisition of deposits and also please their bosses to get timely promotion and best posting.

I feel pleasure that now MOF has wisely and rightly decided to remove deposit and advance target for future assessment of bank's performance.
MOF will now focus on profit, growth in Net Interest margin, non-interest income, financial inclusion etc. Of course this will result in healthy growth of deposit and advances also. Bankers will now pay their attention on quality of lending and low cost deposits to boost profit prospects.
Bank officials will not dare offering higher rate of interest on bulk deposits only to serve their self interest of achieving targets set by MOF.
After all it is public money which bank officials are supposed to manage for the betterment of society as also for the growth of bank and its depositors.

Gradually RBI and MOF will also realize that freedom given to banks to decide their own rate structure for deposits and advances is also causing damage to banks and creating unwarranted, unhealthy and avoidable competition among public sector banks .

Banks in general are managed by officers who do not possess adequate banking knowledge, who are inefficient, inexperienced, greedy, flatterers and corrupt officials and who focus more on self interest than on true health and future of their employer bank. As such unregulated freedom given to bankers resulted in corrupt practices and bad habits.

I hope now at least CMDs of various banks will not indulge in window dressing of deposits and advances and in turn they will not expect window dressing from their juniors to achieve the unrealistic targets imposed on them for deposits and advances.

In brief I may say that by saying good bye to target for deposits and advances, MOF has now started beginning of end of bad culture and launching of new initiatives to attract true value to government sector banks.

I hope now policies and action programme in public sector banks will move in new direction and enter into new era and give birth to new culture and at least keep flatterers away from mainstream. And gradually erstwhile corrupt bankers will be forced to focus on recovery of bad loans created and accumulated by bad bankers they produced and concentrate on growth of real profit and discard habit of manipulation with financials and discard the habit of concealment of bad loans to earn good will of Ministers.

Last but not the least, Flatterers will no more get out of turn elevation in post and position and true bankers will get the chance.


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