Business Standard

Letters: Asset liabilities

Related News

This refers to the edit “Worsening asset quality” (November 12). The deterioration in the quality of assets may be partly due to the downtrend in the economy, but the same cannot be taken as a matter of consolation for banks and stakeholders of banks. The seeds of non-performing assets (NPAs) are sown during the boom period when banks expand credit, throwing caution to the winds all appraisal standards. Borrowers take full advantage of this liberalised approach of the banks. The only way to curb formation of NPAs in banks is to discipline the borrowers by strict appraisal standards and close monitoring of loan accounts. They need to be rated based on their conduct of loan accounts. Banks should levy a small fine when their performance deteriorates. As it is, the cost of maintaining bad accounts in banks’ books is debited to the profit and loss account, which is at the cost of depositors’ interest and other stakeholders’ share of dividend.

T V Gopalakrishnan Mumbai

Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
All letters must have a postal address and telephone number

Read more on:   

Read More

Letters: Crossing the line

This refers to the report “UBS fined $47.5 million in rogue trading scandal” (November 27). Despite robust internal controls and risk management ...

Recommended for you


Quick Links

Financial X-Ray Rss icon

Asian Paints: Weak show to test rich valuations

Poor volume growth and slower pick-up in new businesses might trigger earnings downgrade

Ashok Leyland's Q3 PAT below estimates

Higher tax rate, sequential fall in operating margin impact profit

Back to Top