A V E
Established: 1995
Issue 35, 2020
Saturday, April 4th 2020
Illustration: Takhe Tamo Reela
In Our Interest
-Mrs. Priyankoo Kashyap Das, HSM Dhansiri, Department of Commerce “THE Indian Banks' Association is now quite an Philippines, Brazil and Indonesia. important body among the commercial and financial Dramatic events have shaken up the Indian Banking associations in the country, and the Chairman's speech System with banks showing illegal and unethical transactions that have led them to declare bankruptcy of such an august body, starting with Dena Bank, The Oriental Bank of therefore, demands more than a Commerce to the PMC and the more recent Yes casual reference. Unfortunately, Bank. This has shaken the customer’s faith in this year's Chairman, has not private banks. ventured to look in a different and The Yes Bank appears to have gone on a constructive way at the problems loan giving spree most of which could faced by the Indian Banks. He has be traced back to its owner now harped on the same old themes in custody, Mr. Rana Kapoor, like unhealthy competition violating the regulations from the Exchange Banks, set by the RBI. Clearly, the inefficiency of the accounts of the bank weren’t clerical staff and the being rightly reported and the consequent rise in auditor was in cahoots with the expense ratio etc. bank on this. It also needs to be Sounds familiar...? Well this was said that the RBI how H.C. Bhaba’s speech was has been caught reported in The Economic daily on napping. 24th March 1956. The question that The Indian Banking System has remains posed is since then been nationalized, what can be done disinvested, retailed and revamped now? innumerable times in the hope to A majority of make it an efficient and fair body. the banks have The Indian Banking System consists achieved guidelines as of 20 Public Sector Banks, 22 Private per the International Banking Sector Banks, 44 Foreign Banks, 44 supervision accord of Basel II. However, not just Regional Rural Banks, 1,542 Urban Cooperative Banks and 94,384 Rural Cooperative Public Banks but Private Banks also need to be given Banks, in addition to Cooperative Credit Institutions. enough teeth to be able to fight against the political However, this plethora of banks suffers from a malaise pressure imposed on bankers by our Netas and other that is common to the country and which is perhaps the agencies if we are to be a truly a progressive economy. only reason that we aren’t that great (even though we The RBI must remove the "culture of leniency". It has started the Asset Quality Review and is becoming would like to believe otherwise). These banks suffer the burden of bad loans that they "more decisive in enforcing penalties on non-compliant have given away also known as the Non-Performing banks". Assets (NPAs). RBI’s report revealed that Indian Once the banking sector gets its act together and refuses banks have the highest number of NPAs as compared to be a stooge, only then, shall we see a thriving banking to 10 emerging economies including China, Turkey, sector. Therein lies our hope.
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