Mantra for low NPAs? Only risk management people should meet promoters

Given the spate of scams that has hit the banking sector, the CEO of a leading non-banking finance company in a board meeting recently commented that the only way to deal with such situations is to ban banks’ top managements from meeting promoters of companies. “When promoters approach banks for loans, only the risk management people should meet them.” The rationale being that the risk management team meets promoters in the presence of the top management, they tend to get influenced by the closeness of the top management and promoters. In fact, the CEO mentioned that the head of a leading bank has minimal interaction with promoters. Instead, he spends more time travelling around the country seeking opportunities for the 

bank’s expansion.

Reliable (F)ace 

The Facebook data leaks have not just led to creative headlines in newspapers but also innovative advertisements. Using the controversy, top auto maker Tata Motors highlights the reliability of its light commercial vehicle, Ace (also known as chota hathi). It has rolled out an ad saying, “Acebook, the face of trust”. The ad shows an elephant relaxing under a tree and reading a book titled ACE 2 Million Success Stories and an Ace standing next to it.

Patriotism in IPOs

The tepid response to the Initial Public Offering (IPO) of state-owned defence manufacturer Hindustan Aeronautics hasn’t gone down well with many in the financial industry. Bankers and market participants have accused home-grown mutual funds for being unpatriotic in not subscribing to HAL shares during its IPO. “HAL is not just another company, but the future of India’s defence. These institutions bid for corporate IPOs where shares are offered at much higher valuations, but skip HAL,” a banker was 

heard saying.