The unions contended that the banks could register 4.82 lakh trade profit in last few years with expansion of banking activities across the country. Each employee used to register Rs. 5.21 crore business in 2007 and it had gone up to Rs.12.13 crore, indicating the robust business of all public sector banks in the country.
The government and IBA, however, argue that there was a downward trend in profitability of banks. The argument was far from reality as the banks’ operating profits have been increasing. The NPAs were increasing due to wilful default of bank loans by corporate and
industrial houses. The bank employees and officers should not be held responsible for it.
In fact, only 12 per cent of the total establishment expenditure was being spent towards salaries of the officers and award staff, the protesters said.
2. Crony Capitalism Thrives, PSU Banks Robbed In fact, only 12 per cent of the total establishment expenditure was being spent towards salaries of the officers and award staff, the protesters said.
Blind By JAY BHATTACHARJEE 7th December 2014
A few days ago, Reserve Bank of India Governor Raghuram Rajan made an interesting observation. The central bank chief hit out at Indian banks for disguising their bad debts by numerous strategies, including writing them off. He also cited other dubious methods of whitewashing off-colour balance sheets.
We must compliment Governor Rajan for speaking out bravely and fearlessly, and bringing out in the open one of the worst-kept secrets in Dalal Street and in the Indian financial markets. These are the intricate machinations between Indian banks, specifically the PSU banks, and their profligate clients who have borrowed humongous sums of money from the former and conveniently defaulted on the repayments. This is a very apt real-life demonstration of the old adage that a borrower who owes a few thousand rupees to his banker is in real trouble, while it is the other way round if he has borrowed a few hundred crores. This is, in any case, what they teach in the finance and banking 101 courses in the MBA schools these days.
Public sector banks in the country wrote off Rs 34,409 crore of bad debts in the financial year 2013-14, compared to Rs 27,231 crore in the previous fiscal year. This write-off accounted for 34 per cent of the Non-Performing Assets (NPAs) of the PSU banks. These figures were disclosed by the finance minister a few days ago in Parliament but there was little public reaction. It is as if Indians have either become blasé about these enormous fiddles that are taking place openly or are too tired to raise their voices. Governor Rajan’s data was even starker — according to him, the total amount of bad debts written off by desi banks (overwhelmingly PSUs) in the last five years would have paid for all the expenses of sending 15 lakh of the nation’s poorest children to the top private universities in the country. ...
Despite plethora of laws, the manner in which Indian corporates have taken the mickey out of the PSU banks gives a new twist to the old phrase of laughing all the way to the bank. The most dismal aspect of the entire saga is the complete failure of all regulatory agencies and organisations of the state, including the finance ministry, the RBI, the Department of Company Affairs, SEBI etc. To this potent mixture, add the judicial/court system and the legal community, and we end up in this shambles. It is futile to classify the culpable parties according to their guilt; this commentator feels that the wrongdoers in this loot and scoot competition rank pari passu (a Latin term, used often by hotshot lawyers, which means something that is equal in all respects). The only victims here are the Republic’s hapless citizens.
--R.B.KISHORE