My View on "RBI for Making Aadhaar Sole Platform for Financial...":
Ms Deepali Pant Joshi, ED, RBI has put the cat out of the bag. According to her "Over 90 per cent of the 4.1 per cent gross NPAs are created by large corporates," "Among the poorer sections, only 4.4 per cent of total NPAs are from the farm sector, while the share of the MSMEs is only 5.2 per cent. So where is the poor retail customers creating bad loans in the system? NPAs are not a creation of the poor but the rich," News that huge share of NPAs is from the corporates is no surprise given that NPAs like that of KFA loans, Bhushan Steels etc., are still not classified as wilful defaults. And RBI has done very little to bring sense to the bankers and it is just watching the actions from the sidelines. If none of their inspection reports of various banks which financed KFA has observed the failure of banks in classifying the KFA loan as a wilful default there is something wrong with the quality of such inspection reports and RBI should revisit those reports and find if there was any action required against the officials who inspected these banks. If the farm loan share is so low in NPA, then why should not RBI allow Andhra Pradesh Govt to waive the farm loans. Every year, every bank writes off huge amount of corporate debts through management decisions. Has any bank at any time waived any farm loan through management decision? The answer is a clear 'NO'. If banks fail to write off farm loans for genuine reasons the governments would be forced to step in. That is what AP govt is trying to do.
- Dr.S.Santhanam
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