The news item which
appeared in ET today (29/10/2012), and some other media report indicates
that our above referred article has the desired impact. The news
under the heading "Increasing Corporate Defaults Force Finance Ministry to
Review PSB Loan Process" shows that GoI is now forced to review the
process of sanction of such huge loans without sufficient collaterals.
Similarly, it is reported that FM has issued
statement saying that PSU banks take huge exposure without collateral whereas
private banks ensure adequate safeguards. I feel these steps are in the
right direction and we have been able to bring to the centre-stage the issue of
Titanic Defaults which are likely to make a huge impact on the working of PS
Banks. [Some may not agree that this is the impact of our article as Government
never agrees that it caved in to the public pressure].
I must admit here that we have
not revealed much new in the above
article. Each and
every banker in senior management and
above was well aware of the above facts.
Even most of the media houses are in
full knowledge of such irregularities,
but no one either in the banking circle
or in the media wanted to highlight the
same as it could have impacted either
their job or the revenue they get in the
shape of advertisement from such big PS
Banks. We decided to expose this
nexus and open the can of worms so that
it is discussed thread bare and general
public becomes well aware of the
corruption at the top level.
I
feel what we did was something like what
Kejriwal did in case of Vadra (certainly
it is at a much much smaller
level) . In case of Vadra
also, full media was aware of the facts
but they used to write in hushed tones
(or were afraid to highlight the same)
so that it does not have the desired
impact. However, Kerjriwal decided
to bring the same to limelight by
holding press conferences etc. I
do not have the following or resources
which Mr Kejriwal, (who is really
doing yeomen's service for rooting out
corruption) enjoys. We do not have
any investigation teams. Thus, we
work on the basis of what appears in the
newspapers and what is shared with us by
our readers.
The report published in
ET inter alia reads "A former bank Chairman said if the finance ministry is
serious, it should also shield banks from pressures. There are calls
on behalf of promoters from the top level, he said 'and when politics takes
precedence over banking, the result is a spurt in bad loans' ". This
is an important statement as it is coming from a former Chairman. The cat
is out of bag, though every one was aware that there is cat in the bag!!
This is a clear indication of corruption in sanction of loans - admission by a
former Chairman.
Another paragraph in
the same report reads "while admitting some irregularities in certain cases,
state run banks are worried the review ordered by the finance ministry may turn
into a witch hunt. If the economy would have been doing well, there
would not have been defaults...." said Chairman of a bank.
The above appears to be
a foolish statement and I am shocked that it has been given by a Chairman.
First it admits about irregularities and then it talks about witch hunt.
This Chairman wants that let them commit brazen irregularities and there should
not be any action as it will appear to be witch hunt. Great
statement from corrupt people. Moreover, anybody with basic
knowledge of Risk Management is well aware that such risk management
policies are designed to meet adverse eventualities which happen only during bad
times. Why banks take collaterals? Will they need these
during hey days of the business? Even a clerk in bank knows that they are
meant only to be looked into in bad times.
Chairman needs to visit the basics of credit.
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I am fully aware that
such ripples are likely to be soon forgotten and the extremely rotten system is
able to digest such criticism as people in power are master manipulator.
Poor Kejeriwal's protests and spending nights in the open at Sansad Marg were
easily side-tracked by deep silence of the political class.
Frustrated, he had to abandon the protests at Sansad Marg.
Similarly, even
the ripples created by ABS's articles will be difficult to sustain,
BUT WE WILL CONTINUE OUR EFFORTS and hope that
with the support of the bankers and general public, we will be able to
bring at least some awareness / changes - beginning is always better than
complete silence.
I am NOT asking my
readers to contribute money for this cause, but I wish they spread this
message and keep on visiting our website from time to time to keep the flag
high. I am sure you will contribute to this cause at least supporting us.
You can give your feedback / comments
about this Article. Please give only
relevant comments as irrelevant comments are
waste of time for yourself and our other
readers.
