http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/pension-liabilities-force-jp-morgan-to-cut-price-targets-of-psu-banks-by-10/articleshow/8687902.cms
http://articles.economictimes.indiatimes.com/2011-04-09/news/29400706_1_gratuity-liability-gratuity-act-bank-auditors
It has been reported several times to RBI, Banking Division, IBA, Finance Minister, Prime Minister in particular and Government of India in general that chief of public sector banks are not making adequate provisions for towards pension and gratuity payable to their retiring and retired employees .There are instances when management of some banks have not even contributed and deposited their contribution equivalent to PF contribution recovered from their employees , either PF optees or for Pension optees. Unfortunately government and all responsible authorities have thought it fit to turn blind their blind eyes and deaf ears towards all factual reporting made by expert and true bankers. Even bad assets are certified as good assets in collusion with team of Chartered Accountants.
It is ironical that whenever poor health of any bank is exposed, misdeeds of top ranked officers are exposed , lack of monitoring and non fixing of staff accountability come to picture the stalwarts of banks put the onus of ill health of bank on global recession, inflation, or rise in interest rate. They never try to accept the real reason of malady rampant in banking industry. Culture of flattery and bribery, practice of pick and choose policy in promotion and posting are the root causes of growing sickness in public sector banks. Incompetent and inefficient judiciary add fuel to fire ,fail to protect the respect and dignity of good and devoted officers and ultimately fail to prevent corrupt officers getting elevation year after even though they are the master of corruption.
This is why the accumulated burden of bad assets hidden below the face of balance sheet has ballooned to uncontrollable position and now getting punctured in gradual way. Due to vested interest of top ranked official and corrupt chief of various banks health of banks has suffered continuous erosion. It is worthwhile to mention here that when chief of SBI got retired in the recent past ,the misdeeds of that bank have came out to some extent through their annual result. If loans upto Rs.50.00 lacs are also classified as per RBI norms honestly and through CBS system there is no doubt that SBI will face sharp erosion in share value and face critical capital crisis .Similarly when chief of other banks who committed large scale fraud with the system are revealed only when they get retirement or they are transferred to other banks
In the same way bribe led lending done by corrupt top officials by giving verbal and telephonic advice to field functionaries is not declared bad assets even if the same is bad as long as the concerned top ranked officer of that bank is given a safe exit or some junior rank officers are made scapegoat or related the files are closed. Manipulation in Balance Sheet and concealment of cancerous disease in the banking system cannot protect banks from probable eruption of crisis in near future.
1 comment:
RBI cannot understand the gravity of hidden Volume of Non Performing Assets, stressed assets, restructured assets and bad assets as long as they have faith on team of bankers who run the star performing banks and chartered Accountant who audit the banks called as best performers. RBI will have to take the help of CBI officials who are well versed with banking activities and who know the intricacies of Core banking Solution. There are several techniques to conceal bad assets and publish rosy picture in quarterly or annual balance sheet. I do not have any faith on neither CA nor bankers who are master in figure manipulation, manually or by system. I am afraid of common men whose hard earned money is parked in public sector banks. Gradually loan of provision for NPA will increase in banks and ultimately a sub-prime like situation will precipitate and when RBI will put ban on withdrawal of deposits. Proportion of NPA has gone up from 0.5 percent to 3.5 percent of total advances. And it will continue to rise year after year. Banks under public sector are full of corrupt officers, inefficient officers, and unwilled workers. Legal system is incapable to deal with political heavy weights and local goondas who build undue pressure on sanction of new loans and for write of bad debts. Situation in banks as such will grow alarming gradually.
None is really bothered of real health of bank. Everyone is busy in cooking up figure and manipulating financial to make it attractive somehow or the other. Finance Minister is busy in present a rosy picture on financial deficit and GDP growth , IT officials are busy in increasing revenue collection through coercive methods from honest tax payers ,bankers are busy in lending more and more to boost up lending figure and so on ….Who bothers for real health of the country. Politicians are busy in announcing one after other vote bank schemes despite financial constraints. Undoubtedly cancer of corruption is becoming alarming and dangerous and media is unable to ascertain the bitter truth of economy and future of the country..
Post a Comment