...............While there must be a presumption of innocence until there is a verdict of guilt, the facts as they have been reported raise some larger questions about public sector banks. Are the huge NPAs in PSU banks entirely attributable to economic adversity and bad judgment? Or do we have reason to suspect that they owe significantly to governance issues? The Syndicate Bank case draws attention to the bank’s loan appraisal and risk management systems. Even assuming the CMD enjoyed the discretion to make suo motu lending decisions without consulting the internal committee, how could there be a discretionary element in recognising NPAs? ............
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