Letters: All things circumstantial

It is quite disturbing to read that outstanding loans by wilful defaulters of public sector banks have gone up 20.4 per cent to Rs 92,376 crore at the end of the financial year 2016-17 compared with Rs 76,685 crore at the end of 2015-16. The number of wilful defaulters has also risen to 8,915 from 8,167.


The concept of non-performing assets (NPA) was introduced to ensure that balance sheets of banks reflect the true picture of their financial position. The underlying idea was that banks should take follow-up of loans and advances sincerely so that the profit of the banks does not suffer.


But the trend of ever-increasing NPAs in the last few years points to laxity on post-credit action by banks. They should not give the public a chance to get the feeling that banks and loan takers are working hand in hand to loot the money. This applies to private sector banks, too. A private sector bank that started functioning two years ago sold about Rs 2,000 crore of a dozen accounts to an asset reconstruction company during 2016-17. Such facilitators help banks give a facelift to their balance sheets, but it does not augur well for those banks discharging their duties.


A few days back, State Bank of India Chairman Arundhati Bhattacharya said: “In India, NPA is treated as criminal; it should not be. Permission to fail is not given by society. But failures will take place.” She said the loans were given when the gross domestic product (GDP) growth was 8.5 per cent and loans had turned bad as the GDP had fallen to four per cent. Who should be blamed for the economic ills of the country? Not politicians, not economists not bankers! Everything is circumstantial? Ramanath Nakhate   Mumbai

M G Warrier   Mumbai

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