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.
