State-run lenders led by Canara Bank allege irresponsible lending by some banks contributed to ongoing crisis
......If the borrower fails to repay a bank’s loan, all lenders in the consortium are forced to classify the loan as bad and set aside money for it. But this does not happen under multiple lending. According to Raman, under current Reserve Bank of India (RBI) norms, major lenders to the same borrower should share information. State-run bankers raised this issue with financial services secretary D.K. Mittal and RBI Deputy Governor Subir Gokarn in separate meetings last week, according to bankers familiar with the development. Analysts blame indiscriminate diversification for the crisis at DCHL. The company ventured into areas such as aviation and book retail besides bidding $107 million for Deccan Chargers in 2008.......
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