NPA IN BANKS ARE OLD OR NEW -- PRE MODI ERA OR POST MODI ERA?

One experienced  and senior banker ask a valid question as follows. Please read question and then my answer to him below the question.

एक बैंकर होने के नाते सभी बैंकरो से एक प्रश्न ~~~~  किसी व्यापारी या उद्योगपती का किसी बैंक मे पिछले 15-20 वर्षों से कोई लोन खाता चला आ रहा है। खाता PA है व इसी के आधार पर खाते का नवीनीकरण बैंक करता आ रहा है। वर्ष 2014-15 तक लोन खाते के संतोषजनक व PA होने के कारण नवीनीकरण कर दिया गया। अब वर्ष 2015-16 के नवीनीकरण के समय पाया गया कि व्यापारी या उद्योगपती ने खाते का परिचालन ठीक प्रकार से नही किया व खाता npa हो गया जिससे बैंक के लिए खाते का नवीनीकरण करना संभव नही हो रहा है।। तो प्रश्न है कि खाता 2015-16 से NPA माना जायेगा या उसे 15-20 वर्ष पहले से ही गलत या खराब खाते की श्रेणी मे रखकर 15-20 वर्ष पहले लोन स्वीकृत करने वाले बैंक स्टाफ को दोषी माना जायेगा या जिसके समय मे लोन खाता npa हुआ है ?? धन्यवाद ।।

My Answer is as follows.  Bankers are requester to read and comment.

Your question is genuine.

But being a banker you are well aware that how bank management  has been hiding bad debts for last ten years and more. Restructuring and evergreening  of loans are two tools which bankers have used freely  during last decade and more just to hide their bad debts and book extraordinary high profit so that real culprit officers who sanctioned loan based on bribe gets comfortable retirement  and then a few juniors are made scapegoat that too by downgrading one or two increments. Top bosses got huge incentives based on inflated profits.The then government  remained mute spectator because they were all beneficiaries of such malicious  lending and then write off.

This culture of bad lending , then concealment of bad debts and finally write off of loans or sacrificing major portion of bad loan under compromise settlement have remained the well accepted culture under mute and telephonic guidance from top bosses ad top politicians. RBI was helpless or dormant or also part of illegal deal.

After Mr Rajan and Modi government  came to power bankers got strict instruction to identify bad loan as bad loans. They complied instruction  only partially. Still bankers are not exposing their full bad debts because this may cause bank unbearable and unsustainable loss. This may cause acute erosion in creditworthiness, capital as also lending capacity  of public sector banks PSU banks.

 Therefore it is undoubtedly true that  even now bankers are hiding bad loans by using various illegal methods which govt cannot visualise. I hope  being a senior banker you know all these types of manipulation  taking place since long.

Obviously for majority of NPA now coming to light are of UPA period and it will be unethical to put entire blame on those OFFICERS who renewed loan or who sanctioned it. We need to analyse where is the real fault. Sometimes loan account goes bad due to unavoidable and genuine reasons too.We cannot generalise the answer.

Laymen or Modi haters and those who are out of power after enjoying power for decades are trying to mislead voters by creating confusion and misconception by dint of false and fabricated informations posing on social sites.

MEDIA MEN who do not know even ABC of banking are also adding fuel to fire. They cry loudly without knowing the intricacies of the matter for the sake of their TRP or to serve politicians for whom they act as agents or to help businessmen who give them huge money for this Himalyan Task of proving wrong as right.

Same story relates to frauds also.  When an officer commits fraud and caught, even then frauds is not declared and a gang of looters start how to change the colour of fraud by using lame excuses and how to protect officers who committed fraud. As such even fraud has become an  established culture. Banker during UPA rule were free to violate norms not only in lending but also in the matters related to recruitment  posting and promotions and that too in the name of merit.

 Complaints after complaints  generated but officers who were birds of same feather were expert in closing the chapter related to complains. Same cuture still prevails not only in banks but also in other departments  including  PMO grievance redressal cell.

I have been making follow up on some issues from mountain to mole hill and from top to bottom officers but matter has not budged an inch because all top officers forward the complaint to juniors  and then sleep or go in hibernation. This is a deep rooted and well accepted culture of our bureaucracy.

However I am very much confident that forensic audit of all big or small NPA account may reveal the reality and expose the real culprit. If there is a will there is a way.

UPA GOVERNMENT  FOCUSSED ON LENDING during their rule  , lending  GREW UP BY LEAPS AND BOUNDS , BY MORE THAN 25 PERCENT PER YEAR.
NOW WHEN THE NDA GOVERNMENT  HAS REALISED THE GRAVITY OF UNDERLYING RISKS OF CONCEALMENT OF BAD DEBTS THEY HAVE  TAKEN A FEW STEPS TO KNOW WHAT IS WHAT. But still they lack desired sincerity

Still government is  far behind in protecting PSU banks from gang of looters and irresponsible  persons sitting at helm of affairs not only in banks but slso in administration, RBI and in ministries.

Politician cry for some time and then  forget or dilute their endeavours in fear of erosion in vote bsank or in fear of backfire from some corners. Still miles to go to reach a poont which will be termed as healthy banking and healthy GOVERNANCE.