It is lack of understanding of media men that they have concluded that bankers are refraining from window dressing. Persons who are associated with bank know it very well that it is the cuture of bankers to use window dressing to achieve the set target and to misgude their mentor ministers.Bankers increase deposits, advances, and profit by window dressing and reduce Non Performing assets by using tools of restructure and evergreening of loan. This culture is deep rooted and bankers cannot sleep without using tools of window drssing to inflate their business artificially and get promoted.
Every year Government of India and RBI issue guidelines to Chiefs of banks to refrain from window dressing and every year bankers use window dressing in clear defiance of guidelines .Neither Government is intersted to ensure compliance of its guidelines, nor are the bankers afraid of non-compliance . This is why figure of total business rises abnormally in the month of March every year and fall down sharply in the month of April. It will be proved this year too as soon as figure of first fornight of April is compard with that of last dayy of March 2016. Basically it happens so in every quarter of the year but not to large extent , only to a small extent.
Auditors and inspectors are appointed by RBI to audit accounts of every big branch and submit report on various parameters including window dressing in their final report . But unfortunately , these auditors as usual are also greed of gifts and free hospitality and hence when they are given warm welcome , they turn blind eye on all evil acts of branches . They are also bothered of getting exorbitant audit fee without actually doing job equivalent to fee they receive for auditing. It is they who certify the correctness of classification of assts and cacluation of profits even though there are many lapses,manipulations manipulations, deficiencies and shortcomings in accounting of the branch.
Banks stay away from Window Dressing to Grow Their books -DNA 04.02.2016
The credit growth figures released by the Reserve Bank of India (RBI) on Wednesday showed that the credit growth for Indian banks during the fortnight ending March 18 showed a slight rise of just Rs 29,140 crore to Rs 72,77,650 crore, with most of the growth coming from the retail sector, and a tepid growth in the corporate book.
This fiscal-end, banks have refrained from taking one-day deposit or one-day credit as they shift their focus from balance-sheet expansion to the management of bad debt.
While the non-performing assets (NPAs) are expected to be high, banks are expected to reap huge treasury gains as they will be able to write back depreciation on the investments and also book profits with the yields on the government securities falling by 0.30% in the quarter. According to the estimates by rating agency Icra, gross NPAs is likely to increase from Rs 4.5 lakh crore (6% as on December 31, 2015) to increase to Rs 4.8-5.3 lakh crore by March 2016.
While the non-performing assets (NPAs) are expected to be high, banks are expected to reap huge treasury gains as they will be able to write back depreciation on the investments and also book profits with the yields on the government securities falling by 0.30% in the quarter. According to the estimates by rating agency Icra, gross NPAs is likely to increase from Rs 4.5 lakh crore (6% as on December 31, 2015) to increase to Rs 4.8-5.3 lakh crore by March 2016.
Government to tighten screws on banks' "window dressing" of accounts -4th June 2015
The government is set to overhaul annual targets for public sector banks this month, ending a focus on size that has long encouraged banks to inflate their loans and deposits at the year-end to hit growth objectives.
Banking and government sources said the new targets, to be discussed at meetings with top state bank officials this month, would focus on efficiency, with objectives set around return on assets, or return on equity, and controlling bad debts.
The shift, the government hopes, will also put a stop to widespread "window dressing" of state banks' financial accounts at the end of the fiscal year, the time at which the health of their balance sheets is officially assessed.
Banking and government sources said the new targets, to be discussed at meetings with top state bank officials this month, would focus on efficiency, with objectives set around return on assets, or return on equity, and controlling bad debts.
The shift, the government hopes, will also put a stop to widespread "window dressing" of state banks' financial accounts at the end of the fiscal year, the time at which the health of their balance sheets is officially assessed.
Window Dressing in Public Sector Banks -15th June 2015 by Danendra Jain
An Appeal to Government of India on Window Dressing
From time to time RBI and Government of India have asked and advised public sector banks to refrain from window dressing in deposits and advances. Still bank officials indulge in window dressing every quarter and this has been happening for decades. Window dressing is nothing but artificial inflating of business and reduction of stressed assets.
Bank officials inflate deposits in the last week of quarter or year and the same comes down in the first week of next quarter or year . Similarly they inflate figures of advances in the last week and get appreciation and awards from their bosses and from Ministers. This results in undue award to non performers and unjustified punishment to real performers.
Similarly on the front of bad assets and stressed assets, bankers hide bad assets by using the tools of rephrasing, restructuring and through evergreening of loan processes . Due to this timely action is not initiated against defaulters and during this time , defaulters disposes off the assets and then pray for compromise settlement or write off of the dues. In this way Recovery from defaulters is adversely affected.
Ultimately it is the government of India which has to suffer. It is taxpayers money which is infused in bank to protect them from falling due to mismanagement of bank officials or due to exploitation of banks by politicians. I add politicians because it is they who have been misusing banks for political advantages during each government in some way or the other. It is politicians who have damaged the banking culture.by their ill motivated advices and by suggesting writing off of loan for political gain.
Will you act against who have indulged in window dressing in the quarter ended June 15 despite your instruction not to do so in the same month?
It is important to say here that GOI can make real plan based on real figures only and similarly bank can recover bad money only if they take timely action.
Lastly I may add here that banking is a service industry and one cannot judge the performance of any individual based on figures. There are several Branch Heads or Bank heads who achieve the targeted figure somehow or the other but the customers of the branch and bank are not happy with the service extended .It may be these achievers who have added major portion of bad assets in their bank.
Here I would like to give an illustration TO substantiate my views. Suppose I am Branch Manager of a branch or Chief of a bank. I indulge in bribe based lending and achieve the advance well in advance. Then I use a little part of the ill earned money to buy deposits from government departments and public sector undertakings who have surplus funds and who can keep bulk deposits in my branch or in may bank, I can achieve and surpass even the target set for deposits. In this way I will be considered as good performer by my bosses, I will earn cash incentive and get quicker promotions. On the contrary those who have lagged behind the target or who have contributed lesser business by good means and by extending best services to customers may be rejected in cash incentives and in career.
But in the long run, advance made by me may become bad assets and cause huge loss to bank and force bank to arrange for larger capital. Customers may be dissatisfied with services extended from my branch because I focused on only few high value customers and neglected common men .Growth achieved may not be long lasting and stable. On the contrary , a person who did quality lending and who focused on retail business did the best for the health of the bank .His advances may remain standard healthy for years and decades. Bank may earn consistent income from such quality lending .
Future of bank depends not on figures but on quality of service it extends. Good culture is more important than good figures a bank achieves. Respect and recognition of real good performers can only help in giving permanent growth and consistent profit to a bank or a branch. Similarly wrong lending to achieve the target may give some temporary relief to political masters for temporary period but in the long run even persons like Devi Lal , V P Singh, Janardhan Pujari or Chidambram who promoted Loan Mela or Loan waivers used for for vote gain were rejected in election by voters. IN the same way bank officials who resort to evil means to achieve the target are trapped in corrupt dealing sooner or later or punished by almighty GOD in later part of life.
A Student who passed the examinations of his life by using unfair means may not necessarily get success in real life. A person may get job by using unfair means may be rejected by employer in short period. A bank may book inflated profit and book higher growth in business by using window dressing and by concealing stressed assets but sooner or the later the bank is exposed and subjected to hard medicine and surgical operation to survive or merged with some other bank . Unfair means in any sphere of life has bad outcome . There is no substitute to truth and real growth .
Stressed assets or Non Performing Assets in Banks are like tumour in body of a person. If the Doctor considers it as insignificant in early stage or do not diagnose it , it my grow and if the same is not removed by medicine or by surgical operation in initial stage it may turn into cancerous disease and cause huge loss leading to ultimate death of the patient. Similarly a person in intoxication of wine acts like lion and start driving his car in high speed and without control. If the power attained by wine is considered as good it may result in fatal accident. In the same way growth attained by window dressing is unreal power and unreal growth and result in accident in future.
From time to time RBI and Government of India have asked and advised public sector banks to refrain from window dressing in deposits and advances. Still bank officials indulge in window dressing every quarter and this has been happening for decades. Window dressing is nothing but artificial inflating of business and reduction of stressed assets.
Bank officials inflate deposits in the last week of quarter or year and the same comes down in the first week of next quarter or year . Similarly they inflate figures of advances in the last week and get appreciation and awards from their bosses and from Ministers. This results in undue award to non performers and unjustified punishment to real performers.
Similarly on the front of bad assets and stressed assets, bankers hide bad assets by using the tools of rephrasing, restructuring and through evergreening of loan processes . Due to this timely action is not initiated against defaulters and during this time , defaulters disposes off the assets and then pray for compromise settlement or write off of the dues. In this way Recovery from defaulters is adversely affected.
Ultimately it is the government of India which has to suffer. It is taxpayers money which is infused in bank to protect them from falling due to mismanagement of bank officials or due to exploitation of banks by politicians. I add politicians because it is they who have been misusing banks for political advantages during each government in some way or the other. It is politicians who have damaged the banking culture.by their ill motivated advices and by suggesting writing off of loan for political gain.
Will you act against who have indulged in window dressing in the quarter ended June 15 despite your instruction not to do so in the same month?
It is important to say here that GOI can make real plan based on real figures only and similarly bank can recover bad money only if they take timely action.
Lastly I may add here that banking is a service industry and one cannot judge the performance of any individual based on figures. There are several Branch Heads or Bank heads who achieve the targeted figure somehow or the other but the customers of the branch and bank are not happy with the service extended .It may be these achievers who have added major portion of bad assets in their bank.
Here I would like to give an illustration TO substantiate my views. Suppose I am Branch Manager of a branch or Chief of a bank. I indulge in bribe based lending and achieve the advance well in advance. Then I use a little part of the ill earned money to buy deposits from government departments and public sector undertakings who have surplus funds and who can keep bulk deposits in my branch or in may bank, I can achieve and surpass even the target set for deposits. In this way I will be considered as good performer by my bosses, I will earn cash incentive and get quicker promotions. On the contrary those who have lagged behind the target or who have contributed lesser business by good means and by extending best services to customers may be rejected in cash incentives and in career.
But in the long run, advance made by me may become bad assets and cause huge loss to bank and force bank to arrange for larger capital. Customers may be dissatisfied with services extended from my branch because I focused on only few high value customers and neglected common men .Growth achieved may not be long lasting and stable. On the contrary , a person who did quality lending and who focused on retail business did the best for the health of the bank .His advances may remain standard healthy for years and decades. Bank may earn consistent income from such quality lending .
Future of bank depends not on figures but on quality of service it extends. Good culture is more important than good figures a bank achieves. Respect and recognition of real good performers can only help in giving permanent growth and consistent profit to a bank or a branch. Similarly wrong lending to achieve the target may give some temporary relief to political masters for temporary period but in the long run even persons like Devi Lal , V P Singh, Janardhan Pujari or Chidambram who promoted Loan Mela or Loan waivers used for for vote gain were rejected in election by voters. IN the same way bank officials who resort to evil means to achieve the target are trapped in corrupt dealing sooner or later or punished by almighty GOD in later part of life.
A Student who passed the examinations of his life by using unfair means may not necessarily get success in real life. A person may get job by using unfair means may be rejected by employer in short period. A bank may book inflated profit and book higher growth in business by using window dressing and by concealing stressed assets but sooner or the later the bank is exposed and subjected to hard medicine and surgical operation to survive or merged with some other bank . Unfair means in any sphere of life has bad outcome . There is no substitute to truth and real growth .
Stressed assets or Non Performing Assets in Banks are like tumour in body of a person. If the Doctor considers it as insignificant in early stage or do not diagnose it , it my grow and if the same is not removed by medicine or by surgical operation in initial stage it may turn into cancerous disease and cause huge loss leading to ultimate death of the patient. Similarly a person in intoxication of wine acts like lion and start driving his car in high speed and without control. If the power attained by wine is considered as good it may result in fatal accident. In the same way growth attained by window dressing is unreal power and unreal growth and result in accident in future.
Also read following blog
Also read
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