I do not agree with the excuse given by clever bankers that there is economic slowdown which has resulted in lesser credit growth in the current financial year. There is no slowdown in the economy and hence it is foolish to blame economy or to blame the global recession for slow rate of credit growth. It is the culture of Indians to blame other countries, to blame environment or interest rate or natural calamities for all its inefficiencies and bad intention for poor performance resulting in poor credit growth. 

In fact there are still hundreds  of branches of many banks in India which have achieved credit growth of more than 50  percent or even more than 100 percent in some cases .Banks like Axis Bank, HDFC bank , Kotak bank ICICI bank invariably book a credit growth of more than 30 percent in a year whereas public sector banks can book hardly 15  percent credit growth and that too by mostly window dressing and by sanctioning of short term loan in the last fortnight of the quarter or year .The million dollar question therefore arises ,”Is economic slowdown only for public sector banks?

In the recent past, pressure on bank officials at all levels has increased to a great extent and this has resulted in creating panic in most of the bank’s branches. Officers who earned huge wealth by sanctioning loan to unscrupulous companies have actually got retired or not holding the top posts in the bank. Now when due to their ill motivated lending, account has become bad, entire pressure for recovery of money from such willful defaulters and recalcitrant borrowers lies on innocent and inexperienced officers posted at branches. They neither get time, nor do they have enough knowledge of how to sanction loan and how to recover money from bad borrowers. There is clear message and crystal clear impression among bank employees and in in banking arena that erring officers get promotion and recognition at all levels whereas innocent and good performers are sidelines, rejected and tortured.

 In fact there is always a fear of account going bad in the mind of credit processing officials if the integrity and capacity of the loan seekers appears to be bad or doubtful though they are ready to offer desired bribe to loan sanctioning officials. In the olden days even if the loan account sanctioned by a branch head turned bad they used to conceal the same as long as they were posted in the branch and even their successors were not permitted to declare a bad account as Non performing assets as long as higher authorities permitted on phone. But in the age of CBS and when system is mechanically recognizing (if not tempered by clever bankers) generating NPA, they are afraid of getting exposed during their tenure only and hence they avoid sanctioning loan to such loan seekers.

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