This refers to “On a high horse” (April 30). The Supreme Court decision will have far-reaching implications. The depositors and public will be able to peruse the annual inspection reports (AIRs) of banks, find out about the quality of management, the efficacy of the internal control systems, the lending and investment practices and the financial health of these entities. Financial indicators regarding liquidity and solvency of banks will be available in the public domain. Issues about how banks deal with big loan defaulters will also be revealed. The AIRs will also reveal the quality of the supervisory mechanism of the central bank. It will be revealed whether important aspects concerning the functioning of banks were looked into and commented on adequately. It will definitely bring greater transparency about how the banking system functions.
However, there are serious pitfalls too. Uninformed readers who don’t know about the way banks function could draw wrong conclusions after reading the AIRs and base their analysis on faulty premises. Ill-informed reports and faulty analysis floating around in the public domain could cause serious harm. It is imperative that the information available in the AIRs are studied carefully and that there is balanced analysis and greater responsibility before putting them in the public domain.
Arun Pasricha, New Delhi