Reality of bad loans

It has been the demand of many bankers before RBI to relax norms for classification of assets as Non performing Assets. It is because most of banks are showing profits by hiding bad assets and cutting down the amount of provision and booking inflated profit on unearned income. Banks know very well that concealed NPA are likelty to explode if norms are norms are relaxed by RBI.

RBI has infused capital in so many banks so many times in the past because they also know very well how bankers are cooking their balance sheets by concealing bad assets and window dressing in credit delivery and deposit mobilization. Government of India waived loans of 70000 crores last year before the evil activities of banks are revealed by Auditors. Waiver of loan and compromise settlement is an on going process where banks are constrained to sacrifice good money in bad hands.

CMD who flatter Ministry and key figure in the government is believed blindly as long as big exposure takes place as happened with Satyam Computers. Once upon a time Chairman of Indian bank was most beloved figure in banking circle, but when reality came on the floor, he was thrown out of system. I have been regularly writing on various forums on this subject in my language and as peer my competence to open the eyes of person sitting at the top of affairs. In banks , an officer who try to say the truth is thrown ina remotest place to shut his mouth.

As a matter of fact none wants to say and accept the truth and think it wise to remain in fool’s paradise.

There are several Harshad Mehtas, several Raju, many Ketan Parikh, many Natwarlals ,Many Kodas,many fake Sai Babas, Many Icchadharis, a lot of Mayawatis,several Lalus , hundreds of Mulayams, plenty of Rabri Devi in our country who earn unparallel popularity and after a few years face severest erosion in it and have to bear with just reversal in popularity with greater momentum. When they go up in their ladder even if by fake means, media and so called great leaders start worshiping them, following them blindly.

In share market when share prices of a script goes up, all experts on TV and all investors start recommending and buying it. Suddenly real value of that script comes on the floor and all experts starting giving negative news for the same script. Similarly some people are worshipped and condemned without knowing the facts.
Is there anyone who will investigate and discover the real and intrinsic value of PSU BANKS?

Danendra Jain
Ganaraj Chumuhani
Agartala
03.04.2010