Bad loans at public sector banks have increased to Rs 2.67 lakh crore last year. The Non-Performing Assets (NPAs) for the Indian banking system will deteriorate further as the lag effect on asset quality in relation to economic slowdown has not yet peaked. Oh, how sad and how technical? We thought Bank managers can be lured to pass loans in favor of high ROI ideas and glamorous looters, the likes of whom can never be the real bankrupts but eligible for state sponsored bankruptcy bumpers. Heck with public deposits, our return increases in proportion with Bank NPA! Budget concerns also needed to showcase once in a while, for the record. The NPA (not Nuclear Weapons Program) game is also profitable for private #SwachhBanks run by versatile money laundering cronies. Popular schemes are often used to soften the pricing terms, elongation of repayments, without improving the basic viability of the business or credibility of jugaadu cronies.
A jugaad explanation from the corporate looters is that these are tough times for the economy and given that they are not in a position to repay. The trouble is that this is always untrue. For hardly affected bank officers, it is not always possible to establish that a borrower has siphoned off the money or used it for a purpose other than the one which loan has been taken e.g. spin-off a tech startup or flamboyant pacific holidays. When a few dozen blue chip defaulters account for nearly 40% of the bad loans, cronies are on top and proxy lobbyists rule public budgets or civil conversations, real reformers are in sidelines, as always - only god can help the masses, no human messiah can dare!
Primarily because of strategic lapses in the due-diligence carried out by banks before the loans were sanctioned, these rules does not apply to common loan-seekers who are ripped off daily and artistically threatened by goon agents for a few thousands of recovery profit. In first case, defaulter pays the commission and in later the public bank itself, nothing to lose either way. The bankers feel hurt as the NPA ratio moves up, some number gimmick is essential to justify public deposit loots before letting looters slip into laps of paid media jingoists in style. What is the real purpose of devising risk management strategies or academic budget pills to handle legal hurdles raised in the recovery process? Who knows?
DUE DILIGENCE & MONITORING AFTER SYSTEMATIC LOOT AND IGNORANCE:
They are now trying to gather and discuss formally some best practices to strengthen the due diligence process, credit appraisal for effective post sanction loan monitoring systems to minimize and mitigate the problems of increasing non-performing assets (NPAs). Third party agencies such as surveyors, engineers, advisors, consultants, financial analysts, and other verification agencies, etc., plays critical role in sharing the loan loot in amicable and legal ways, who also become most eligible to become part of the so-called civil society lobbying group, for economic analysis and shedding crocodile tears for scoring centuries on camera once in a while.
POST SANCTION LOAN MONITORING SYSTEMS AFTER CARELESS BANKING
Preferring #AntiNational jugaadu #ChorBhakts, instead of giving loans to deserving firms, persons and ideas, they are now in a hurry in identifying and dealing with stressed assets at an early stage to ensure that the level of NPAs in the system will go down. The thieves who got loans can either be caught or we say to depositors - "sorry they escaped".
NPA RISK MANAGEMENT RECOVERY PROCESS AFTER AGGRESSIVE LOAN GIVING
A swift recovery is the need of the hour considering the rising risks faced by the banking sector owing to decline in the asset quality. Examining the legal process and best practices for recovery based on feedback from its own clone of participants, responsible for extending loans for apparently unknown or murky socialization of losses like a 20/20 cric match.