Banks being penalized by RBI for lapses in monitoring of end use of funds–Anil Tikotekar

I was happily surprised to know today that RBI has imposed penalty on bank for not monitoring  end use of funds.  I refer to the news item that appeared in Economic Times today.

As an ex banker, I always felt that many problems would be solved if only we are able to devote quality time for monitoring end use of funds lent. [ Of course I am also aware that for this to happen, Banks concerned must have a re-look at the staff deployment strategy ]

I also happened to read a news item that appeared in Business Standard   today regarding the level of NPAs in PSBs.  The important statistics –on the basis of the news item —is as below:

  1. Bad loans in PSBs as of December, 2018 are 8,64,433 crore. [ Provisional Data ]
  2. There is a reduction of 31168 crore as compared to the level as of March, 2018
  3. NPAs declined as a result of the Government’s 4Rs strategy of recognition, resolution, recapitalization and reforms.

From the above statistics , it is crystal clear that there must have been good response to recovery efforts initiated by PSBs.  Further the reduction of 31168 crore as of December, 2018 over March, 2018 must also mean that the actual recovery must have much much more because the figure of 31168 is net reduction.

It would have been better if fresh accretion to NPAs over March, 2018 had also been quoted.  This would also have indicated how much effective IBC 2016 has been.

In any case, banks cannot afford to slacken their recovery efforts because recovery efforts have to be on continuous basis to get the desired results.


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