Letters: Lending is a risky game

This refers to the report "Bank credit growth falls below 10% after 5 years" (September 18). This is not good news for the Indian economy and banking sector. It should serve as a wake-up call for the government. To give a few examples, the Male airport project has gone from GMR to a Chinese firm. GMR could have used money from Indian banks to fund this project. IndiGo signed a $2.6 -billion deal with the Industrial and Commercial Bank of China Ltd to finance the purchase of aircraft. Indian banks could have got a share of the pie in this.

Efforts have to be two-pronged. First, the government should encourage and support large investment. It is understood that the Chinese president was involved for the Male airport deal. Narendra Modi used to do the same thing for Gujarat. Second, bankers should not live in a fear psychosis. Recent action against a few bankers has jolted the rest. While acts of corruption must be caught, the government also needs to understand the risks that bankers take in lending. Lending is a business of risk and if every loan not repaid is questioned within the bank or by external agencies, bankers may think twice before taking a risk.

Shiva Kumar 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
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number