Letters: Recovering NPAs

This refers to the Charan Singh's article "Why are NPAs higher in public sector banks?"(May 20). Comparing non-performing assets (NPAs) and the recovery practices of private and public banks is like comparing apples and oranges since the internal ecosystems both work in are poles apart. The very fact that private banks have urban, higher ticket-size assets and mostly do not tread in the muddy backwaters of the Indian economy - infrastructure and direct agriculture - helps keep their hands and credit portfolios dry. Even in tractor financing, they mostly skim the surface in a countryside where 60 to 70 per cent of the farmers have marginal land holdings below five acres, but still need tractors. Agriculture finance forms a minuscule part of their portfolios. Having said so, it certainly does not take away the attention from the poorer performance in NPAs in public sector banks (PSBs). Improvement in handling NPAs suffers from the inbreeding of PSB staff: you may fire an executive for poor performance in NPA recovery, but a substitute from the same bank may still be worse. Why doesn't the government prepare a list of ace NPA recovery personnel - volunteers, serving or recently retired, across all public and private sector banks - and then rotate them in different banks with definite mandates and see the results?

Y P Issar Karnal

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