In an unprecedented move for the government sector, ailing public sector lender Uco Bank sought to stop the salaries of about 200 employees at 11 branches in Kolkata, citing non-performance as the reason. However, following agitation by employee unions, the salary was released the next day.The move is being described as a first-of-its-kind in the history of public sector banks by former top officials of PSU banks.
This refers to aforesaid news published in various newspapers that salary of a few staff of Uco Bank has been stopped due to so called non performance of staff. Later under pressure of trade union leaders, management of Uco bank withdrew the said order.
In my opinion, such actions are inevitable and likely to be enforced in near future too. After all top management will have to search some scapegoat to hide their evil works of several years which they continued to conceal for brightening their career .This is an open secret that top officials are seldom taken to task for any negligence or irregularities or fraud or bad debts. It is invariably the juniors who are asked to submit explanation for any account going bad .
Accountability is never fixed on seniors or politicians who are solely responsible for big ticket loans and big amount Non Performing assets. Junior officers have to process the loan proposals as per sweet will of seniors and they are forced to conceal negative points of the proposal so that Chief of the bank or senior offices of the bank may sanction big amount of loans to whom they like.
On the contrary , suppose a boss does not want to sanction a loan to a firm or a company due to reason best known to them, they have hundreds of reasons to reject the proposal and such rejection also forced on field level officials . Obviously sanction or rejection of loan proposals specially loan above Rs one crore depends largely on whims and caprices of seniors . Credit ethics and credit principles are twisted as seniors like to favour or disfavour a loan applicant.
Obviously ,NPA in banks have gone up not due to clerical staff or junior officers. All big amount loans are sanctioned by seniors only. And 99 percent of NPA of all banks are due to defaults made by big borrowers numbering hardly a thousand. It means if we add amount of top 1000 NPA accounts, it will cover 99% of total NPA of the banking industry which is declared by banks. Besides , much more amount of bad accounts which are as good as NPA as per RBI norms are still hidden in books of banks only to save and protect seniors. Bad accounts are hidden at the instance of seniors only and they are concealed till sanctioning officer of bad loan gets promotion and later gets safe retirement.
Staff union and officers association remained silent spectators of target oriented lending , under pressure lending, bribe based lending, bribe based recruitment and promotion, flattery based promotions and transfers, write off of loans to please bosses, waiver of loan in the name of cleaning balance sheet , political exploitation of banks for years and decades. Now they advocate action against defaulters instead of cutting salary of poor staff. There is an old proverb in Hindi which says "Sau Chuhe Mar kar Billi Haz ko Chali" .Trade Union Leaders shed Crocodile tears after irreparable damage already caused to banks they represent.
Now it is staff, specifically junior staff and junior officers who have to bear the brunt. Consequences of the evil works done by almost all senior officers of banks during last few decades and politicians for years and decades are now hitting none other than staff of banks. It is nothing astonishing for bankers who have worked for decades in banks and faced humiliation only because they did not listen to whimsical orders and advices of their bosses. Top officials who are real culprits and top politicians who are largely responsible for the current mess in public sector banks are nowhere punished, rather they are awarded again and again.
Leaders who were supposed to protect interest of staff and banks unfortunately became partner of the management in loot of the banks. These leaders rather helped bad officers and protected them from punishment for their lapses . In general these leaders helped a few staff in getting posting at their choice place and won the sympathy of all .
Now only God can save bankers. Damage has already caused huge loss to banks and now this damage will be slowly and gradually transferred to none other than shoulders of poor bank staff who are in majority of cases of bad loans are not at all guilty from any angle of consideration.
Leaders and individual staff who only cried for wage hike and wage hike only for years and decades will now have to fight for their survival and for protecting existing salary and compensation.
Need of the hour demands introspection by each staff, by each leader and and by each senior officer who allowed Draupdi Chirharan or who silently witnessed it or who irrigated and promoted evil culture of flattery and bribery only to please their bosses or to serve their self vested interest.
Mediamen who usually cry loudly after exposure of each big default coming to light like that of Mallya or after unearthing of a big fraud or a scam are too weak and unskilled to understand the intricacies of creation of NPA.They in fact do not know ABC of banking and they praise or condemn a bank or Government only to serve their political masters not for the cause of bank staff or that for the bank or the country.
As such , I usually say and I have been writing for long, that only God can save banks from disaster because I have got the opportunity to witness the ugly culture prevailing in banks and in the politics for years and for decades. RBI took strict measures and suggested remedial measure many times in the past but they had to shut their mouth under pressure of their mentors . This is why volume of NPA has been consistently increasing every quarter though ruling leaders and concerned officers use to claim positive improvement from forthcoming quarter .
All Finance Ministers of past governments misused banks for their vote banks. They resorted to restructure of loans or evergreening of loans to conceal bad loans and to boost GDP growth rate so that their image may appear to be shining. They suggested mergers and consolidation of banks or shifting of bad loans to ARC or bad banks. Old wine in new bottle were their fundas of so called reformation. Similarly , bank officers sitting at the helms of affairs followed the line they got dictated by their mentors . Under such environment , good officers seldom get appreciation and bad officers get untimely elevation and all praise.
Present government has done something better but they too are far behind from success.
No solution is visible until government strike at root of the malady. Present government also resorted to capital infusion and wasted good money of taxpayers in the same way as past governments led by Congress Party did for decades. By resorting to mergers and consolidation , the government can curtain some expenses by closing useless and surplus branches but they will miserably fail in changing the evil culture prevailing in banks and in politics. If the current government really want transformation and good health for banks they will have to strike at the root causes behind rise in NPA and will have to punish evil minded officials and politicians. They will have to make legal and administrative machinery active, effective and least time consuming .
No purpose is going to be achieved by cutting salary of few officers or few staff of some bank or the other. Government can save a few hundreds of crores by giving least wage hike of staff. Government can earn a few crores of rupees by forcing bankers to sell insurance policies or by engaging them in non-productive works or by forcing them to take part in Non-Banking activities . But by doing so, they will simply cause much more loss to these banks . Reformation has to start from the top and if top is cleaned, the good culture will automatically percolate down the level.
If you want to read more please click on following link to know why Modi government will also fail to cure sickness of banks if they do not strike at the root causes of the sicknesses and if they continue to resort to temporary measures like mergers and consolidation or reduction in rate of interest or change of CMD and directors of the bank.
RBI has in fact has not discharged its duty during last three decades in keeping good health of banks either due to ignorance or due to mischievous acts of the government under which they have to work. Whatsoever may be the reason, you may put blame of past government or past governors of RBI or bank officers or politicians who rule this country , there is no doubt in saying that system failed completely in maintaining quality of lending , quality of work culture and quality of treatment to work force. Motivation to performers lacked completely and award of promotion went to flatterers and bribe earner in all sphere of life.
As such Modi government has to do a lot to changes in the culture in banking as well as in politics to achieve targeted , consistent and sustainable GDP growth .Otherwise the wise step of demonetisation and introduction of GST will be blamed for none of their fault in falling GDP.
18 PSBs among top 20 banks with highest gross NPA ratios: CARE Ratings-Hindu Business Line-17th August 2017
Public sector banks are more stressed than their private sector counterparts with the former figuring among the top 20 banks with the highest gross non-performing asset (GNPA) ratios, according to CARE Ratings’ analysis of the first quarter results of 38 banks.
IDBI Bank (with gross NPA ratio of 24.11 per cent of gross advances)
and
Indian Overseas Bank (23.6 per cent) have NPA ratios of over 20 per cent.
Among PSBs, Indian Bank has the lowest GNPA ratio of 7.21 per cent.
Eight PSBs banks — IDBI Bank, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, Central Bank of India, Dena Bank, United Bank of India, and Corporation Bank — had a GNPA ratio of over 15 per cent as of June 2017.
YES Bank is the only bank in the sample of 38 banks with a GNPA ratio of less than 1.
State Bank of India (SBI) accounted for the largest share of about 22.7 per cent (or ₹1,88,068 crore) in the total NPAs of 38 banks (aggregating ₹8,29,338 crore) as of June-end 2017.
SBI, Punjab National Bank, Bank of India, IDBI Bank, and Bank of Baroda accounted for 47.4 per cent (totalling ₹3,93,154 crore) in the total NPAs as of June-end 2017.
Among the top 20 banks, according to GNPAs in absolute terms, 18 are PSBs and only two are private sector banks — ICICI Bank and Axis Bank. These two private sector banks have a combined share of 7.9 per cent in total NPAs.
The agency said the performance of banks with respect to NPAs has not been too positive of late.
“While it was largely expected that the NPA ratios would have settled by March 2017, as there were indications of stabilisation relative to December 2017, the picture emerging for Q1 FY18 is that the NPAs have deteriorated further for the system as whole,”
Please read what I had said in the year 2011
No comments:
Post a Comment