Hello
reader, I would recommend you to take an auto rickshaw today and start a
conversation with the driver, after a brief discussion, he will must say that
“Sahab cost of living has been keep on rising and in this period of time also a
person has managed to flee from India with Rs 9000 Crores of public
money and the government did nothing to nab him. .
After a much discussion on this topic, he will ask you instantly after looking at you, ‘Sahab, from your appearance you are looking like an educated person, can you tell me how these banks can survive and bear this so much losses ?
The
banking sector in India is under stressed and one of the reasons behind this is
NPAs. In the last quarter of 2015-16,
many PSU banks including the State Bank Of India reported a loss of hundred of
crores where in Bank Of Baroda reported
NPAs of more than 3300 Crores. Now to deal with this crisis, small steps
need to be taken like the way a small baby starts walking with the help of
their parents.
Many
industrialists, banks had recommended many solutions over the years but few of
them are now being addressed. The much awaited recommendation has now being
function ( i.e ) BBB ( Bank Board Bureau ) and will be headed by
none other than, Mr. Vinod Rai, Former CAG ( Comptroller & Auditor General
). BBB is like a regulator which will
decide who will go to sit on the Coffers of Public Sector Boards. The problem of NPAs or I would say stressed
assets need to be addressed with effective ways for recovery.
After
the introduction of arbitration acts No. ( 9 ) and (17 ) there is a sigh of relief for smaller
NBFCs but it is alone not helping the bigger assets which have been offered to
bigger conglomerates. Filing of cases, speeding of hearings, smooth process and
fast action need to take place in our judicial system. The judgement need to
take place and that too within a reasonable period of time.
According
to the recent report of some news channels, SBI Chairman, Arundhati
Bhattacharya was asked about the recovery and court proceedings about
Kingfisher airlines, which led the consortium of 17 Banks, she said, ‘Around 81
hearings have been held since 2013 and they are yet to start the recovery’.
Some
industrialists suggested for DRT (Debt Recovery Tribunal) but DRT alone cannot
help to cut the burgeoning NPA crisis. According to some media reports, SBI
moved to DRT for prohibiting Vijay Mallya to flee from India and to seize his
passport but the liquor baron had managed to flee from our country due to our
stalled and lengthy judicial system. There are many factors of DRT which proves
that it alone cannot function properly due to shortage of Staff. We do not have
enough judges in proportion to the numbers of cases which are pending in our
Indian Courts. For instance, we do have around 13 judges per million of our
population where as the developed nations have more than 50 judges per million
of population. Our judges play the role of god and goddess in our country who
can do and take any decision because of their power given by our government.
The
infrastructure also does not support or I would say justify the workload of a
normal court. For instance, a normal
court in Delhi would get allotted more cases in comparison to the maximum
number of cases it can handle. Even
appointment of judges can’t fulfill our objective to remove this menace of NPAs
from our banking system.
We need more judges, faster judicial system, steps like introduction of BBB, faster judgement especially in the cases of willful defaulters, more crackdowns on defaulters, more training to the employees who are responsible for the disbursement of loans.
I
am sure this will help in the effective utilization of tax payer’s money as it
will get used in the development of our Country rather than siphoning off for
the personal/ private use.
