SEBI, RBI and Ministry of Finance have not applied their mind, wisdom and effectiveness in their own duty. Negligence on the part of regulating agencies may be said to be due to inadequate manpower and inadequate infrastructure. But in my view it is due to the fact that many officials of regulating agencies are hand in glove with market manipulators and rich business icons. Such corrupt officials do not forget to preach the sermons to business community from time to time so that they appear to be vigilant. They always talk in terms of growth in figures but they never bother about the quality of growth, distribution of growth and judicious access of product to all common men.

This is why image of India is fully tarnished in international community by one after other exposure of scams in India and it is undoubtedly true that foreign investors will slowly leave India .RBI is silent spectator of evil work of bankers and business giants because RBI has after all to please government headed by great economists Mr. Manmohan Singh who has to listen what Sonia speaks to him. Fraud like Satyam computers, bad lending like LIC Housing Finance  and misuse of borrowed fund by corporate has completely shaken the trust of Foreign investors and will have far reaching bad effects on Indian economy. Still our clean PM talks of GDP growth and feels proud of quality of corporate governance in India.

To me it is undoubtedly clear that all types of frauds, scams, relentless price rise are only due to unlimited freedom given to bankers and businessmen under the umbrella of reformation and due to evil culture inculcated, irrigated and promoted by bad politicians of this country. Business giants are using surplus funds or bank’s unregulated fund to hoard commodities and cause artificial rise in prices for earning unlimited profit , of course in collusion with bad bankers.

Amount of Non Performing Assets in particularly PSU banks is gradually increasing year after year due to not only ineffective judicial remedy but also due to malicious intention of few bankers who carry out their evil work with the help of flatterer filed officials. Human Resource Department (HRD) in PSU banks inculcate and promote flattery culture. HRD sidelines those officers who think for the safety of bank’s interest.

Housing scam which surfaced in the recent pat and which resulted in arrest of eight high rank bank officials are only tip of the iceberg. Corrupt officers are sitting on top post of each bank and they ensure promotion to only those who are expert in the art of earning money and who is number one corrupt. Interview panel in each promotion process gives the scope to pick and choose yes-men for branches where some illegal money can be earned.

It is therefore dire need of the hour to find out and identify corrupt officers at top level and ensure that they are punished and without which one cannot imagine of NPA coming down in any bank. When top officers will be booked to task, clear cut message will reach upto the bottom level officers.

When bank management can publish the name of bad borrowers in Newspapers, Government of India or RBI or Banking Division in Ministry of Finance can also publish the list of bad bankers. At least they can prepare a list of such bad executives whose advances invariably become bad and RBI can ensure their demotion forthwith. When action can be initiated against borrowers to take possession of assets by banks, why not illegal assets of bad bankers also should be confiscated and sold off before public.

Only a healthy culture in bank can help in reducing NPA percentage and help in becoming top ranked performer bank.. Hitherto CEOs and EDs in banks are showing lesser percentage of NPA by increasing volume of fresh and short period advances. Bankers are least interested in lending for agriculture production. They do not want to lend to small traders and industrialists. Similarly they reduce NPA not by recovering the money from defaulters but by selling NPAs to Asset recovery companies (ARC).

Days are not far when this manipulative tactics will also fail to salvage banks. It is therefore necessary that actions are initiated before it is too late.

16.01.2011