Old Wine In New Bottle

Inspite of all efforts said to have been taken by Reserve bank Of India and Ministry Of Finance, stress assets in public sector banks are relentlessly increasing. Every quarter some bank of the other exhibit rise in bad debts and fall in profit.In the quarter ended June 14 some banks like PNB, Indian Bank, Allahabad bank have already declared bad results. 

Only difference is that some officials of some banks are clever and some are less clever. Some banks get success in concealing bad debts in March Quarter and some others in some other quarter. Some banks are expert in art of hiding Non Performing Assets by adopting the process of evergreening of loan and some other are apt in process of restructure, reschedule and rephasing the bad loan so that it remains in standard category.some other banks are selling bad debts to Asset Recovery Companies and some other banks are sacrificing good money of banks by giving extraordinary discounts to bad borrowers to recover the money and some others think it wise to write off bad loans.  

None of the bankers are interested in real improvement of quality of lending and effective steps for recovery of dues form bad borrowers,  , I say none because majority of top officials are bent upon simply hiding the bad loans by applying easy tools so that they may win the heart of clever politicians. Government of India or government of states are little interested in recovery of loans from bad borrowers because they focus only on credit growth , rightly or wrongly. Politicians are themselves beneficiary of bad loans directly or indirectly and hence they do not like to have strong legal action against bad borrowers. 

This is why officials in judiciary and in administration or in Debt Recovery Tribunals show casual approach towards recovery and hence cases against bad borrowers  do not result in real recovery . There is sharp rise in bank cases for recovery pending in various courts. Officials believe in peace process or you may say postponement of remedial measures so that they may retire from banks peacefully without facing any penal action. Bad borrowers who have taken crores of rupees in loan and who are not willfully repaying the dues lead luxurious life , change their firm's name or start business and lastly declare them bankrupt. 


Bank officials or RBI officials do not like to nip in the bud , they willfully and strategically delay the process of recovery and during this delay period , borrowers manage their assets and discover ways to safeguard them from bank's action.Two decades ago United bank , Indian Bank and UCO bank were identified as bad banks and there news of merging them with other stronger bank. But clever politicians in nexus with clever bank officials manipulated Balance sheet of these banks and kept the bank as standard . Now after two decades symptom of sickness are again surfacing not only in these three banks , but almost in all banks, even in so called strong banks like State Bank, Punjab National Bank, Bank of India and so on. 

If forensic audit of all these banks are carried out honestly , I think greater scam will come on the surface. Fraudulent activities in recruitment, promotion, lending , developing infrastructure, opening of new branches , opening of new ATM etc will come to light and people of India as well as bank staff who are denied wage hike for less profitability of banks will also understand the ground reality of banks .

RBI conducted forensic audit of United bank and that of Allahabad bank a few months ago , but the outcome is not known to common men of India. Every report is managed and manipulated as per  whims and fancies of politicians. This is why system does not change , only new rules and policies are framed. Old wine in new bottle has become the working style of bank , politicians and Government as a whole. Neither judiciary nor administration nor police officials nor CBI and CVC can function honestly and devotedly for the sake of growth of India.