Letter to BS: More public sector banks may be told to stop fresh lending

With reference to the front page report, “More PSBs may be told to stop fresh lending” (May 14), by Abhijit Lele, selectively directing weak public sector banks (PSBs) to stop fresh lending may be a good idea, but this cannot, most certainly, be the way out for the larger problem of non-performing assets affecting almost all big PSBs, indeed all banks. We can’t throw the baby out with the bathwater.

What we need to do is to fix responsibility for any laxity and undue favours in the process of sanctioning such loans — essentially looking for possible frauds. Public perception about most loans doled out by PSBs being based not on merits of the case but on how well one knows the officers there — from the manager concerned to the chairman depending on the amount involved — and, more importantly, what one’s “arrangement” with him/her is, may not be wrong. So, we have to look for the culprits, dismiss, disgrace and penalise them so that everyone else gets the message loud and clear.

Why can’t the government become more business-like in assessing and evaluating bank managers, rather than continuing with the outdated paradigm of a “queue” system for their promotions and postings? And an alert income tax department can surely pinpoint those making gains through unethical means. It is easier said than done, but I am also sure that with sincerity of purpose, it is doable.

Krishan Kalra   Gurugram

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