Letters: Self-inflicted wounds

The report "Govt banks develop cold feet on QIPs" (February 5) shows that the scenario is self-inflicted by public sector undertaking (PSU) banks because of lazy banking and poor loan monitoring. Bad debts are dissipating the health of banks that still control more than 75 per cent of the country's banking needs.

The operating profits of these banks are on the rise, but there net profit has seen a clear fall over the years. The weakness lies in the monitoring and appraisal of loans, and the slackness in managing assets. The system is penalising the good borrowers and not able to contain the defaulters. The finance ministry should constantly watch the progress of these banks and appoint bank heads purely on the basis of merit.

M Govardhan Mumbai

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