IBA Panel To Decide Value

The government has asked all Public Sector Banks to approach the newly constituted overseeing committee to look at all their loans and not just the accounts coming under Sustainable Structuring of Stressed Assets (SSS). This has been advised with an idea to widen the process of resolving bad loans. The two member committee has been set up by Indian Bank Association in consultation with RBI as well as vigilance and investigating agency to provide comfort to bank to take measures to address bad loans.

Link To Economic Times

This is another step taken to cover up corruption of each other who are members of Indian bank association headed panel.

Gang of thieves usually have strong  bonding with each other, they try to save each other and try to hide fault of each other. On the other hand there is hardly any unanimity among honest performers. Honest persons stick to their ideals and do not compromise with bad people , rather they think it wise to keep mum. As such panel will be able to do justice with motive only when it is constituted by dry honest and devoted person.

IBA is normally constituted by mostly corrupt CMD of banks and they usually possess patronage of  powerful Ministers. In my opinion, IBA panel will prove to be futile and self deceptive exercise. Government will not be able to serve its motive behind formation of such panel.

Now they , members of IBA will become more cooperative to each other and blindly approve all actions and thus get protection from penal action on the excuse of the fact that decision has been taken unanimously by a group of CMDs i.e by IBA appointed panel.

In banks, most of loan proposals are also  approved by a team of officers called as Credit Approval Committee (CAC). 

Specifically high value loans are approved by a committee headed by CMD and ED of the bank. In such meetings , other members put their signatures blindly where CMD asks for. None of members associated with such committees has courage to put objections in any proposal which is initiated at the instance of head of a bank or a Regional Head or a Zonal Head. As such formation of CAC becomes a mere formality to get rid of conducting staff accountability and fixing responsibility on any individual officer. Erring officers is not punished only because the decision was taken by a committee, though the man behind the decision is always the head of the committee or the organization.

Similarly IBA panel constituted to clean banks from bad loans  will blindly approve the action of each CMD in their mutual interest. Panel will issue a certificate to the effect that the bank's decision is legal and unavoidable. Our country largely run on the basis of certificates. A Chartered Accountant or a team of CAs certify the correctness of accounts of a company or a bank and then everything is considered as good and pious even if there exists a lot of irregularities and fraudulent transactions.

I may say without any doubt and without any hesitation that volume of bad loans will not get reduced only by appointment of a panel. Rather bad loans will be waived or sold to ARC at deep discount at a greater speed to reduce NPA and to protect guilty officers of the bank as also politicians who play the dirty role from behind the screen.

It will cause direct loss to  customers, investors and other stakeholders  of the bank when the IBA panel will blindly certify the waiver of  a loan or selling of  a bad loan at high discount.

It is pity that people of India  who keep their hard earned money in banks have no say in policy decisions or in execution of policies. They can do nothing to stop such high level loot taking place for years and decades . Large value scams taking place in banks in the name of credit growth are not even questioned by media or CBI or CVO or CVC or ACB or even Ministers of finance. 

PSU banks have accumulated NPA amounting to more than ten lac crore rupees and concealed it , still acts of these banks are not considered as SCAM. Rather bank officers always demand that their action should not be questioned by CBI or CVC or ACB. 

And unfortunately famous media men as well as powerful government and RBI officials concur with their evil -motivated demand of bankers. Even editor of Economic Times do not favour action against Chiefs of banks ( See editorial in ET published on 30th of September 2016 titled as "How to Clean up Banking Decisions") and he expresses fear that Chief of banks will  desist from taking decision if there is fear of punishment for wrong decision. 

ET editor  means to say that if army men are punished for indiscipline or there is a fear of getting killed in war, people will not like to join army. In his view, if a teacher is authorized to commit any crime and he should not be punished because it a teacher is punished , teacher class will boycott teaching and dislike job of teaching. What a foolish thought it is can be imagined by any layman. I think Editor has equated wrong decision with ill-motivated decisions.

This is why top bankers get safe exit from bank and even get elevation in career after committing all frauds and indulging in bad and ill-motivated bribe based lending . Rather these ill-minded bankers get lucrative job even after retirement from bank.