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Letter to BS: Good credit supply by banks is necessary for economic growth

The credit decisions are taken based on the conditions prevailing at a particular time.

Business Standard 

financial frauds, frauds, bank frauds

This refers to “Prudent commercial decision taken by bankers will be protected” (December 29). A good credit supply by banks is necessary to keep the wheels of economy rolling and it is essentially related to two factors: One, the ability of the banks to lend more and two, their willingness to lend. While the banks should be sufficiently capitalised to meet the future expansion plans including broadening the asset base, the willingness to lend essentially results from the confidence. The confidence in the public sector banking system has suffered a bit owing to some undesirable factors. The credit decisions are taken based on the conditions prevailing at a particular time. They might turn wrong in some cases at a later date due to some external factors and policy changes which are beyond the control of bankers. There was a needless fear of arrest. The investigating agencies should not take the benefit of hindsight and any kind of harassment caused will not augur well for the system. The honest bankers who have exercised their authority and powers well with due diligence carried out should never be punished.

Srinivasan Umashankar, Nagpur


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First Published: Thu, January 02 2020. 21:03 IST
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