Indian Banks NPA & Restructured Loan Issues - Blamed Others for Own Mistake


For the last two years, the state of Indian Public Sector bank is not in good shape. Everyone is throwing ball in each other court and more specifically, the gifted economy by previous government. As per the article by The Indian Express, Public Sector bank is sitting on more than $110 Bn restructured loan and NPA's whereas write off already done is only for $18 Bn.

The Indian Central Bank Governor took bold step to clean up the books of bank to ensure that next level of growth happen from start while current government is trying to fund the losses of PSU banks by increasing the excise duty on Oil as well as not reducing the oil price.

We all the time blame the industry for taking the loan and not servicing sky high interest rate. I would like to put across few facts which everyone should ask from the employee of PSU banks.

ü  Do they know the analytics or not. If yes, then why they kept on giving the loan to companies having problem of servicing of interest only. Don't blame others but blame internal team members.

ü  Government bank always gives loan against securities, what happened to those securities. They can sell and reduce some losses.

ü  Many Companies reached out to bank for the waiver of high interest rate for certain duration so that money goes in the improvement of infrastructure of companies and ultimately improves the performance.

ü  Why bank is crying that they incurred losses, loan rate of 10 o 15% on the commercial is one of the highest and they made handsome interest rate. Why they did not tried to recover their principle amount.

It's very easy to say that X, Y, Z did a wrong business step and got trapped in this mess but in my point of view; PSU did the blunder as ignorance overweighed duties where they overlooked many KPI's to fulfill their quarterly target and taking home the fat award.
In point of view; RBI must think of hiring professional to run the PSU bank and apply the same rule which US Federal Reserve implemented post financial crisis.
It's my point of view, if anyone is having better view then please contributes.

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