Doctors advise Anna not to venture into the sun

“Anna Hazare’s BP is normal. There is some weakness. His eyes are watery. Doctors have advised him not to venture into the sun as it could have an impact on his health,” Manish Sisodia, a close associate of Mr Hazare said in the wee hours today

New Delhi: Doctors have advised social activist Anna Hazare, whose fast entered eighth day today, not to venture into the sun as it could have a negative impact on his health, reports PTI.

The medical advice came after doctors examined Mr Hazare at the Ramlila Maidan, where he is sitting on an indefinite fast demanding a strong Lokpal Bill, late last night.

“Mr Hazare’s blood pressure is normal. There is some weakness. His eyes are watery. Doctors have advised him not to venture into the sun as it could have an impact on his health,” Manish Sisodia, a close associate of Mr Hazare, told reporters in the wee hours today.

Yesterday doctors had said Mr Hazare was fine though there were contradicting views especially by Mr Hazare’s two associates on the condition of his kidney. A close aide Kiran Bedi said that his kidney was ‘infected’ while another aide Arvind Kejriwal denied it.

Though doctors have been maintaining that Mr Hazare’s health is fine, his close associates expressed worries over the health condition of the 73-year-old anti-corruption crusader.

As he became weak, Mr Hazare decided not to address people yesterday as he was doing the past few days.

Mr Sisodia had earlier said Mr Hazare had lost over 5 kg since he began his fast on 16th August.

“Doctors say his health is okay but we are worried,” he said.

Meanwhile, Mr Sisodia has urged MPs to reflect the views and concerns of common man on the Jan Lokpal Bill when Parliament reconvenes after a break today.

“MPs should take into account the concerns and views of the people on the Lokpal Bill and address it in Parliament. They should remember about the protest that took place outside the residences of some of them,” said Mr Sisodia.

When asked about the 30th August deadline set for passing the Bill, Mr Sisodia said Mr Hazare has announced it and it is for him to decide the future course of action.

“There is no change in our stand. Formal talks have not yet begun,” Mr Sisodia said.

Mr Sisodia said a close aide of spiritual leader Baiyyuji Maharaj, who has emerged as a mediator, went to meet Mr Hazare last night to submit a fresh proposal to end the standoff between the fasting activist and the government.

However, the aide could not hand over a letter from Maharaj to Mr Hazare as he was sleeping, Mr Sisodia added.

“The aide had come to meet Anna in the night. As Anna was sleeping, volunteers did not allow a meeting and the aide left without handing over the letter...,” Mr Sisodia said.

Earlier, a close aide of Maharaj claimed that the spiritual leader had a detailed meeting with Union ministers Kapil Sibal and Salman Khurshid following which the fresh proposal was sent to the Gandhian.

Maharaj, along with Maharashtra additional chief secretary Umesh Chandra Sarangi, both of whom are known to Mr Hazare, have been roped in by the government to initiate back-room negotiations to end the fast by 73-year-old Mr Hazare demanding a strong Lokpal.

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BPOs to grow by 17.9% in Asia, Asia-Pacific in 2011: Gartner

Gartner Research vice-president Cathy Tornbohm said that emerging markets are faring far better and, generally, multinational companies continue to look to BPOs as a means to reduce costs, as well as buoy their business operations

Mumbai: The worldwide business process outsourcing (BPO) market is forecast to grow by 6.3% globally and 17.9% in the Asia-Pacific during the year 2011, reports PTI quoting a study by market research firm Gartner.

"While growth remains strong in developing economies, the US, the world's largest BPO market, presents a mixed picture for the global market," Gartner Research vice-president Cathy Tornbohm said in a statement.

Ms Tornbohm added that emerging markets are faring far better and, generally, multinational companies continue to look to BPOs as a means to reduce costs, as well as buoy their business operations.

"We also see an increase in transaction volumes, especially in payroll, recruiting, accounts payable and customer data analytics and knowledge process outsourcing (KPO) activities," Ms Tornbohm said.

Gartner said that growth in the Asia and Asia-Pacific BPO markets will be positive and is expected to be 17.9% in US dollars terms during the year 2011.

Gartner expects higher demand for services related to customer management (CM) BPO, HR outsourcing, banking, financial and billing BPO services and supply management BPOs through 2015.

Most growth will centre on the key regional economies of India, Australia and China, the statement said.

The firm identified scalability, the infusion of new processes and technology as the key drivers for the outsourcing business in emerging economies within the region.

Gartner estimates that North America's BPO market will grow by 3.8% in 2011.

"Key vertical markets poised for industry-specific BPO growth through 2014 in North America are retail, healthcare, transportation and utilities. Within horizontal sectors, dynamic growth is expected for customer selection in the customer relationship management (CRM) and human resources (HR) domains," Gartner said.

In Western Europe, Gartner estimates that the BPO market will grow by 8.9% in US dollars terms in 2011 due to healthy demand for services relating to customer management, finance and accounting and human resources.

Gartner sees the challenges of language, labour laws and trade unions and the lack of labour arbitrage benefits as limiting the growth of BPO business in continental Europe.

Gartner estimates that Japan's BPO market (expressed in yen terms) will decrease by 0.9% in 2011.

The research firm expects Latin America's BPO market to grow by 14.7% in US dollar terms in 2011, despite the slow growth of the region's IT services industry in 2009.

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Banking study finds rising NPAs in a generally safer product like home loans

A study by FICCI, IBA and BCG highlights that the banking industry is growing in the right direction, but it lags behind global benchmarks in areas like staff deployment and that there is a need for a major overhaul of debt management

Highlights of a banking industry study by FICCI, IBA and BCG

  •  Indian banking industry to be the third largest in the world by 2025
  •  Gross NPAs in home loans vary from 5% to 0.3%
  •  Indian banks deploy 62% of staff in front office as against 82% globally
  •  PSUs are under-investing in technology with only 25% of the global benchmark
  •  By 2020, new channels like mobile phones would account for 20%-30% of financial transactions
  •  The industry appears to be holding a low headcount in human resources and finance roles

A report on productivity excellence in the banking system says that some banks have alarmingly high levels of non-performing assets (NPA) in safer products like home loans.

The study titled, "Being Five Star in Productivity: Roadmap for Excellence in Indian Banking", is based on an extensive productivity benchmarking exercise conducted across 40 banks. It has been prepared by the industry lobby body, the Federation of Indian Chambers of Commerce and Industry (FICCI), Indian Banks' Association along with consulting firm Boston Consulting Group (BCG).

The report says that the Indian banking industry will be the third largest in the world by 2025, because of the sound performance and growth in the country's gross domestic product.

"We have tried to leverage FICCI's network to ensure that we bring together various stakeholders of the financial ecosystem so the expectations of each of them are considered by the banking industry," MV Nair, chairman of FICCI's Banking Committee and chairman and managing director of Union Bank of India, told a news conference today.

Saurabh Tripathi, partner and director, BCG, explained the findings of the report saying, "There are high NPAs in MSME and agricultural portfolios, but even relatively safer products like home loan has gross NPA varying from 5-0.3%." According to the study "any small bank with small market share has high NPA rate in any product."

The study indicates that while the industry, on an average, has an impressive bad debt performance, the bad debt levels in priority sectors like MSME and agriculture are high and that NPA management processes at banks need a major overhaul.

Explaining the need for public sector banks to invest in developing capabilities of risk management, Mr Tripathi said, "New private sector banks have a 23% share in the home loan industry and they have home loans of around 15% on their books. On an average, they have been successful in bringing down NPAs because they have the benefit of designing a business model which suits this product."

The study has urged the government, specifically, to undertake reforms in the real estate sector. "Sixty-eighty per cent of loans are sanctioned against real estate as collateral. Banks in their personal capability can increase the recovery to a limit. Reforms such as an independent regulatory body, transparency in transactions, and computerisation of titles deeds are required," Mr Tripathi said.

When asked about the concerns over rising NPAs in home loans, MD Mallya, chairman of IBA and chairman and managing director of Bank of Baroda, said, "A lot of understanding is required to recognise the saleability of end projects, considering the overall cost factor and whether it would be able to sell it further at a price which is cost plus. I wouldn't say this is a concern, but a challenge to understand basic viability properly, along with the valuation and saleability of the project."

The report also says that branches can generate higher levels of revenue for banks and Indian banks deploy 62% of staff in customer facing roles as against the global benchmark of 82%, BCG observed.

The report says that the public sector appears to be under-investing in technology, with spending at about 25% of the global benchmark. The average administrative overheads is about 11% of the total staff for Indian banks and across bank categories, and the industry appears to be holding a low headcount in human resources and finance roles. The variable pay at 2% of fixed compensation, is significantly lower than the 12%-15% that is found optimal for incentive compensation.

The study says that growth in usage of new channels, like mobile phones, will account for 20%-30 % of total transactions by 2020. ATMs too have seen just 50% adoption even in the metros so far. It recommends that in order to fully utilise retail banking, banks need to invest in adoption as new channels will enhance productivity and acquire new customers.

According to the report, Indian banks are doing well overall, with the industry cost-income ratio below 50%. Most banks have about 20% of staff deployed in back-office processing (some banks have even 40%) as against a global best of 10% observed by BCG. It says that process re-engineering and operating model changes can help reduce costs, improve services and contain operating risks.

The report stresses that a new paradigm is required for risk management, including a different operating model, technology, experience and expertise retention, and minimum critical size of book.

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COMMENTS

danendra jain

5 years ago


Lacs of cases against defaulters of the bank and against NPA borrowers have been filed in various local courts, district courts, Lok Adalats, Ombudsmen, High courts, Supreme court, Debt recovery Tribunals, District Certificate Officers, District magistrate’s court , Sub Divisional Magistrate’ court for taking possession of property seized under SERFAECI act etc have been filed by various financial institutes including public sector banks but due to manpower shortage or due to inefficiency of executives, or due to malicious intention of magistrates and judges, or due to conspiracy of advocates in nexus with judges and magistrates cases are lying pending for years together.

Is there any provision to take action against judges who in nexus with advocates are willfully delaying the process of justice?
If yes, has any government taken any against any corrupt judges in the past which could demonstrate the effectiveness of the Law and willingness of rulers to punish the corrupt judges before it is too late?
Has any of the government taken any drastic step to reduce pendency in courts and to expedite award of justice?
What action government has taken against the judiciary and advocates in recovering the money of banks which have been locked in willful defaulters of the bank?

It is observed that banks have granted loan against fake deed of landed property or financed to many firms against the collateral or prime security of same laded property.
Have government punished any of Sub registrars or deed writer or bankers who worked with negligence and malicious intention?

Banks sanction new loans and advances on the strength of prime of collateral security valued by approved valuers or government recognized valuers. But if these valuers give inflated value of any property after taking extraordinary service charges from loan seeker or with some vested interest or with malicious intention and in turn jeopardize the loan disbursed by banks, what remedial recourse lies with bankers or the government. Bankers at most remove the name of such valuers from their panel or the government blacklist such valuers.
Is there any provision to punish such valuers?
If yes, has any authority or any bankers have ever punished such unscrupulous valuers?
It is observed that Chartered Accountants blindly sign on balance sheets or financial reports of banks and borrowers, companies and firms if they are given attractive amount of money as service charges. These CA while conducting statutory audits of various banks more often than not ,simply put their seal and signature and take attractive fees and charges from banks. Wage without work is the suitable slogan of CAs.

It is also true that CAs have to complete audit of two to three branches in a period of five to six days and hence they can neither make honest and through scrutiny of records of branch of the bank they are asked to audit by RBI nor they have the will to do so because there is no deterrent action if they prefer not to do their duty honestly.
Have government taken any action against any of CAs in the past 60 years which could teach a lesson to team of CA?
Have government pondered over the real need of time period to make a serious scrutiny of balance sheet of a branch?
Or it is planned diplomacy of clever bankers to give minimum time to CA or for that matter any inquiry or vigilance officer so that he comes under pressure and sign the financial papers hurriedly ignoring the faults and mistakes.
Due to sheer negligence and malicious intention of the controlling, monitoring and regulating officials .Chartered Accountants in India have become habituated to claim gift, bribe, grand hospitality and all out of pocket expenses to sign a balance sheet , which may be right or wrong, true or false, actual or inflated. It is only a few stray cases where CAs are greedy and bank officials are dry honest and simple hearted that some of the irregularities are reported in audit report.

It is worthwhile to mention here evil deeds of owner of Satyam Computers was not detected by team of Chartered Accountants and similarly less provisioning made by public sector banks including SBI towards their regular liabilities such as pension, gratuity, NPA was also not detected by team of CAs who use to audit the bank year after year.

Similarly there are advocates who give legal opinion blindly and cause huge loss to banks who on the basis of favourable legal reports and search reports sanction loans to loan seekers and who ultimately become victim of negligence and malicious intention of the advocates. RBI knows very well that huge amount of banks have become irrecoverable only due to multiple financing on same landed property or due to financing on fake deed or due to wrongful and unlawful sale of property already mortgaged to some bank for taking loan.

Have Government taken action against any advocate or any sub registrar or Any Deed writer or any officials due to whose fault banks had to suffer huge loss?
Never ,,, Never because none of government department and offices really want to work especially top ranked officers who are busy in passing the time and retire . Officials in all offices and departments usually remain in search of some clients who can offer attractive bribe in cash or in kind or some precious gifts in lieu of service he extends.

Bank officials who sanction credit after taking bribe are able to please their bosses and ensure their timely and unusual promotion and get choice posting. Honest and intelligent officers are sidelined and posted at critical place or remote rural centers so that their voice against evil work may be stopped. Good officers are denied their promotion in time and juniors are given change after taking bribe. Has government ever tried to stop such bribe based promotions and transfers. Not only this even direct recruitment of officers in various scales is also undertaken by bank officials to earn bribe , campus recruitment is allowed in a college based on whims of some senior officers to give favour to his own boys and girls , of his own community. Not only in banks but top ranked officials of all state governments and central government resort to mass transfer and earn money in lieu of giving favour to staff who desire choice posting and timely promotions.

Police officers do not lodge FIR in their registers, do not execute warrants issued against VIPs by various courts ,do not question criminals but tortures the person who wish to lodge complaint against criminals , defaulters and law breakers.

Has government taken any step in last 60 years to change the system and procedure of police department which give them unrestricted powers and which tempts them to take whimsical decisions and arbitrary action against honest and true citizens?

Hundreds of cases filed against corrupt officers related to misuse of power, fraudulent activities, bribe led lending, lack of monitoring, negligence of duty, favour to dishonest contractors, passing of bills of unscrupulous suppliers, passing of fake bills or inflated bills either lie pending for disposal for years together in the office of Vigilance office, CBI,Anti Corruption bureau, or Human resource department for decisive action against erring officers or such files are closed acquitting erring officials . New trend has developed in government offices to burn the loss of files related to corruption of high profile officers. File are made untraceable or declared lost.
Why?
Is there any mechanism or tool in the rule book or almirah of the government to prevent such malpractices which frequently and recurrently occur almost in all offices, departments and Secretariats of various Ministries?

Political stalwarts spread propaganda that loans of poor farmers or big businessmen will be waived by the government or by the bank .Such ill motivated propaganda ultimately vitiates the atmosphere of recovery. Government announces waiver scheme from time to time for electoral gain. As a result borrowers of the bank willfully default in repayment of bank loan. Quantum of Non Performing Assets known as bad assets in public domain continues to rise year after year in all public sector banks. Then process of compromise and write off starts at bank level and again there is unhealthy transaction of money between bankers and borrowers or between brokers and officers who decides to sanction sacrifice loan amount. Ultimately culture of non-re payment of loan by borrowers back to banks takes the root and bankers have to suffer huge loss due to high provisioning and due to rising NPA. For this purpose bank officials , union leaders and politicians all are friends and relatives of each other.

Government has not courage, no will, no effective tools to punish bad politicians because government is made of such corrupt politicians only. Government has no courage to punish kith and kin of powerful politicians and bureaucrats who have willfully defaulted in repayment of bank loans and payment of tax dues or other charges due to government.

This is why there is mass upsurge against rampant corruption and people of India have started raising voice against corrupt system.
Government can punish Ramdeo or Anna Hazare but cannot stop public revolt.

I salute RBI deputy governor Mr. K C Chakravorty , in charge of banking supervision who has openly expressed doubt on integrity of CMD and ED of public sector banks. He asked for more consistency in financial reporting of banks. He said yesterday that financial reporting should not be as per minds of bank ‘s chairman . When Bank chairmen change profit tends to fall. Mr. Chakravorty has substantiated his observation by citing example of few banks like SBI, Bank of Baroda .Bank of India and so on. He further said that the issue s not standardization of reporting system but to examine the integrity of information need in financial reporting.

I salute the editor of the valued Newspapers who have given prominent place for such news in edition of 7th June 2011. I am at least not astonished to read the views of RBI deputy governor because I have been writing similar views since long. It is true that views of laymen like me are not published. Since RBI deputy governor has expressed doubt on integrity of CMD of banks, the esteemed newspaper thought it fit publish the same on front page. Anyway I am pleased that there are some few people sitting at top posts who at least realize the bitter truth of corrupt system prevalent in banking sector. I am happy that RBI governor has pointed out the accusing finger towards chief of public sector banks. If he dares to look into ugly shape of various branches of top ranked banks, he will find that the position of branches , at least seven out of ten branches is much more stinking and dangerous for survival of the bank.

I fully agree with the views of RBI deputy governor that financial reporting changes after change of Chairman of that bank. I simply add that bad health of a branch is also visible only when head of the branch changes. It has to be kept in mind that financial report of any bank is nothing but sum total of financial report of its branches. As such when integrity of financial report of a bank is doubtful , it gives the undeniable message that financial report of its branches are doubtful and hence need thorough and inspection and investigation.

Need of the hour as such is to punish the person who promoted bad culture, who indulged in bad lending in banks and who caused huge loss to the bank directly or indirectly even if he or she is retired and at the same time bring sidelined officers back into mainstream to provide safety to ailing bank as soon as possible.


I suggest RBI deputy governor to take stern action against a few CMD of top banks who failed to maintain sanctity of financial reporting , who played fraud with system , who manipulated balance sheet, who indulged in bulk financing to increase credit deposit ratio, who indulged in window dressing in deposits, who did not make adequate provisions for pension and gratuity, who willfully sanctioned huge credit to unscrupulous corporate houses, who promoted bribe led lending by giving verbal and telephonic instruction to his subordinate General Managers and Deputy General Managers, who promoted the culture of hiding bad assets and thus who postponed recovery action on bad borrowers and punitive action against corrupt subordinates officials who in writing recommended sanction of loans to bad borrowers, who promoted bad culture in recruitment , promotion and posting of officers, who gave out of turn promotion to corrupt officers to promote bribe culture, who sidelined good officers or used good officers to clean the branches spoilt by flatterer bad officers, who promoted fraud culture in reporting of financial reporting, who by verbal orders instructed field functionaries to play fraud with CBS system and conceal bad loans to avoid provision for bad loans and to inflate profit etc.

RBI governor has to demonstrate his good intention by taking stern punitive action against Chairman of such banks whose financial reporting has not only tarnished the image of that bank and regulating agencies but also cheated the investors who believed on financial results and put money in shares of such banks. Chief of such banks whose action has caused huge loss to the bank in subsequent years must be brought to task even if he or she is retired from services .
I would like to mention here that every CMD and ED of each bank has a few, not all, general managers around him whose work is to flatter the boss, earn bribe through various ways. Collect gifts from his subordinate Deputy General Manager, assistant general managers while sanctioning loans to such bad businessmen who can afford giving big amount of bribe .It is necessary to point out here that such top ranked officers used phone call to get their evil work done These general managers share such ill earned money with ED and CMD in various ways. It is open secret that any GM, DGM or AGM or any executive cannot dream of becoming ED or CMD of a bank until he or she spends 25 to 50 lacs of rupees in getting the support of various members of interview panel who are empowered to select the person for the post of EC and CMD of a bank in public sector. When corruption is unavoidable at top post it is but natural this corrupt culture percolate the down the line.
Regional Head or Zonal head of a bank has liberty to pick and choose officers of his or her choice for posting at various bribe-potential branches, he has the power to whimsically promote an officer to higher scale or reject an officer in promotion process, he has the power to sideline honest officers to remote places when there is chances of such officers raising voice against corrupt activities of regional head. In such environment it is but natural that officers tend to become number one flatterer to his boss .Every officer in bank knows very well that if flatters to his boss and share his ill earned money (earned through bribe) honestly with his boss, gives costly gifts to his boss and his family and if he extends red carpet welcome to his boss during his visit to the branch, his promotion and good posting is guaranteed. On the contrary he also knows very well that performance is not the weapon which can ensure elevation in career. This is why flattery and bribery culture is spread in Public sector banks like cancer.

It is not an exaggeration to say that just like CMD and ED of a bank each Regional Head or Zonal Head or Circle Head has a few Branch manager say five out of ten who have got Doctor degree in art of earning bribe in sanctioning of loans, in contractual work, in supply work, in recruitment, posting and promotion of staff and in all financial transactions. Such corrupt branch managers and senior officials are master in art of speaking and toeing the line of bosses and extending all unwarranted services to even family members of Regional Head. These junior level officers earn money through lending and purchase deposit from government officials. If a branch manager is ready to pay a few thousands and a few lac to government officers he can get deposit in crores of rupees. When deposit increases he can sanction loans and earn bribe without any objection from controlling offices, vigilance officers and auditors. Because such corrupt officers know the art of managing Chartered Accountants, Internal Auditors, RBI inspectors, CBI officials, vigilance officers and all who are potential danger to his corrupt deals.

It is not that financial reporting of a bank changes after the change of CMD or Ed of a bank. True fact is that fate of most branches changes when head of branch is changed. Bad advances sanctioned by such corrupt officers are not treated as Non Performing Asset as long as he remains posted in that branch or as long as regional head of the branch who is also beneficiary of bribe directly or indirectly is changed. Financial report of such branch changes after change of branch manager. This is why NPA reported by such branches exhibits quantum jump in ratio when corrupt team of officials are transferred to other states. Even then team of corrupt officers sitting at central offices try their level best to protect such corrupt officers and leave no stone unturned to close the files against such corrupt officers containing serious charges of lapses and corruption against erring officers Rather they choose some level junior officers to clean the malady accumulated by corrupt officers and ultimately such junior officers are made scapegoat .This is the culture of public sector banks.

It is not therefore surprising that quantity and ratio of NPA in each bank has been rising every quarter. Profitability of every bank is at stake in the hands of such crooked officers who are holding top posts. There are numerous branches in each bank where NPA percentage is more than 20 percentage to more than 50 percentage of total advances of that branch. Heads of banks are saving their image by resorting to bulk financing at the fag end of each year or by selling their NPA to other financial institution or ARCs or AMCs. How long such manipulation in financial data will help in keeping bank alive, only God knows.

I salute RBI deputy governor Mr. K C Chakravorty , in charge of banking supervision who has openly expressed doubt on integrity of CMD and ED of public sector banks. He asked for more consistency in financial reporting of banks. He said yesterday that financial reporting should not be as per minds of bank ‘s chairman . When Bank chairmen change profit tends to fall. Mr. Chakravorty has substantiated his observation by citing example of few banks like SBI, Bank of Baroda .Bank of India and so on. He further said that the issue s not standardization of reporting system but to examine the integrity of information need in financial reporting.

I salute the editor of the valued Newspapers who have given prominent place for such news in edition of 7th June 2011. I am at least not astonished to read the views of RBI deputy governor because I have been writing similar views since long. It is true that views of laymen like me are not published. Since RBI deputy governor has expressed doubt on integrity of CMD of banks, the esteemed newspaper thought it fit publish the same on front page. Anyway I am pleased that there are some few people sitting at top posts who at least realize the bitter truth of corrupt system prevalent in banking sector. I am happy that RBI governor has pointed out the accusing finger towards chief of public sector banks. If he dares to look into ugly shape of various branches of top ranked banks, he will find that the position of branches , at least seven out of ten branches is much more stinking and dangerous for survival of the bank.

I fully agree with the views of RBI deputy governor that financial reporting changes after change of Chairman of that bank. I simply add that bad health of a branch is also visible only when head of the branch changes. It has to be kept in mind that financial report of any bank is nothing but sum total of financial report of its branches. As such when integrity of financial report of a bank is doubtful , it gives the undeniable message that financial report of its branches are doubtful and hence need thorough and inspection and investigation.

Need of the hour as such is to punish the person who promoted bad culture, who indulged in bad lending in banks and who caused huge loss to the bank directly or indirectly even if he or she is retired and at the same time bring sidelined officers back into mainstream to provide safety to ailing bank as soon as possible.


I suggest RBI deputy governor to take stern action against a few CMD of top banks who failed to maintain sanctity of financial reporting , who played fraud with system , who manipulated balance sheet, who indulged in bulk financing to increase credit deposit ratio, who indulged in window dressing in deposits, who did not make adequate provisions for pension and gratuity, who willfully sanctioned huge credit to unscrupulous corporate houses, who promoted bribe led lending by giving verbal and telephonic instruction to his subordinate General Managers and Deputy General Managers, who promoted the culture of hiding bad assets and thus who postponed recovery action on bad borrowers and punitive action against corrupt subordinates officials who in writing recommended sanction of loans to bad borrowers, who promoted bad culture in recruitment , promotion and posting of officers, who gave out of turn promotion to corrupt officers to promote bribe culture, who sidelined good officers or used good officers to clean the branches spoilt by flatterer bad officers, who promoted fraud culture in reporting of financial reporting, who by verbal orders instructed field functionaries to play fraud with CBS system and conceal bad loans to avoid provision for bad loans and to inflate profit etc.

RBI governor has to demonstrate his good intention by taking stern punitive action against Chairman of such banks whose financial reporting has not only tarnished the image of that bank and regulating agencies but also cheated the investors who believed on financial results and put money in shares of such banks. Chief of such banks whose action has caused huge loss to the bank in subsequent years must be brought to task even if he or she is retired from services .
I would like to mention here that every CMD and ED of each bank has a few, not all, general managers around him whose work is to flatter the boss, earn bribe through various ways. Collect gifts from his subordinate Deputy General Manager, assistant general managers while sanctioning loans to such bad businessmen who can afford giving big amount of bribe .It is necessary to point out here that such top ranked officers used phone call to get their evil work done These general managers share such ill earned money with ED and CMD in various ways. It is open secret that any GM, DGM or AGM or any executive cannot dream of becoming ED or CMD of a bank until he or she spends 25 to 50 lacs of rupees in getting the support of various members of interview panel who are empowered to select the person for the post of EC and CMD of a bank in public sector. When corruption is unavoidable at top post it is but natural this corrupt culture percolate the down the line.
Regional Head or Zonal head of a bank has liberty to pick and choose officers of his or her choice for posting at various bribe-potential branches, he has the power to whimsically promote an officer to higher scale or reject an officer in promotion process, he has the power to sideline honest officers to remote places when there is chances of such officers raising voice against corrupt activities of regional head. In such environment it is but natural that officers tend to become number one flatterer to his boss .Every officer in bank knows very well that if flatters to his boss and share his ill earned money (earned through bribe) honestly with his boss, gives costly gifts to his boss and his family and if he extends red carpet welcome to his boss during his visit to the branch, his promotion and good posting is guaranteed. On the contrary he also knows very well that performance is not the weapon which can ensure elevation in career. This is why flattery and bribery culture is spread in Public sector banks like cancer.

It is not an exaggeration to say that just like CMD and ED of a bank each Regional Head or Zonal Head or Circle Head has a few Branch manager say five out of ten who have got Doctor degree in art of earning bribe in sanctioning of loans, in contractual work, in supply work, in recruitment, posting and promotion of staff and in all financial transactions. Such corrupt branch managers and senior officials are master in art of speaking and toeing the line of bosses and extending all unwarranted services to even family members of Regional Head. These junior level officers earn money through lending and purchase deposit from government officials. If a branch manager is ready to pay a few thousands and a few lac to government officers he can get deposit in crores of rupees. When deposit increases he can sanction loans and earn bribe without any objection from controlling offices, vigilance officers and auditors. Because such corrupt officers know the art of managing Chartered Accountants, Internal Auditors, RBI inspectors, CBI officials, vigilance officers and all who are potential danger to his corrupt deals.

It is not that financial reporting of a bank changes after the change of CMD or Ed of a bank. True fact is that fate of most branches changes when head of branch is changed. Bad advances sanctioned by such corrupt officers are not treated as Non Performing Asset as long as he remains posted in that branch or as long as regional head of the branch who is also beneficiary of bribe directly or indirectly is changed. Financial report of such branch changes after change of branch manager. This is why NPA reported by such branches exhibits quantum jump in ratio when corrupt team of officials are transferred to other states. Even then team of corrupt officers sitting at central offices try their level best to protect such corrupt officers and leave no stone unturned to close the files against such corrupt officers containing serious charges of lapses and corruption against erring officers Rather they choose some level junior officers to clean the malady accumulated by corrupt officers and ultimately such junior officers are made scapegoat .This is the culture of public sector banks.

It is not therefore surprising that quantity and ratio of NPA in each bank has been rising every quarter. Profitability of every bank is at stake in the hands of such crooked officers who are holding top posts. There are numerous branches in each bank where NPA percentage is more than 20 percentage to more than 50 percentage of total advances of that branch. Heads of banks are saving their image by resorting to bulk financing at the fag end of each year or by selling their NPA to other financial institution or ARCs or AMCs. How long such manipulation in financial data will help in keeping bank alive, only God knows.




Nagesh KiniFCA

5 years ago

As an auditor of long standing associated closely with the RBI and CAG audits, I maintain that NPA/Bad Debts just do not appear overnight.
It is only after the banks choose to conveniently close their eyes to incipient signs/indicators -
cheques issued beyond the available balance, non-submission of securities/stocks/debtors statements or going beyond permitted drawing powers are just few pointers.
If, and only if, branches make note and act promptly on these indicators can the functionaries at the branch level nip in the bud the menace of growing NPAs.
It doesn't require any technology but only alert and dedicated effort on the part of the lowest and the highest.
No extra cost. Just plain and simple common sense! Any takers?

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