Final diagnosis

Subject: Govt must provide capital to banks on upfront basis: United Bank CEO

M G Wa rrier's response:                             

June 15, 2019
Final diagnosis

This refers to the report “Govt must provide capital to the banks on upfront basis: United bank CEO” (Business Line, June 15). It is comforting that since 2016, GOI and RBI have been handling the health issues of the financial sector with all the seriousness they deserve. The problems have aggravated and solution lies in overhauling the system equipping it to meet the expectations of all stakeholders.
From restoring the trust of savers to ensuring uninterrupted credit flow at reasonable cost to all sectors of economy across urban and rural areas, the task before the system is multi-dimensional.  Political leadership is responsible for converting banks as agents for implementing popular schemes irrespective of their feasibility and viability and luring industrialists with soft credit. The institutional system including the supervisors and regulators also need to share the blame for the laxity in appraisal of loan proposals, inadequate follow-up and recovery efforts, encouraging external arms for doing own business to save on establishment expenditure and so on.  
The present efforts by GOI, RBI and the institutions in the financial sector to retrieve the system from destruction are commendable. To ensure that the banking system remains healthy hereafter, professionalism should be infused at every level and political interference in policies once formulated should stop.
M G Warrier, Mumbai   


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