With increasing RBI heat, bank defaulters making amends: Senior banker & ASSOCHAM panel co-chair

With increasing pressure on banks for recovery of non-performing assets,  defaulters, especially those in the ‘wilful defaulters’ category are making serious efforts in utilising  loan for the rightful purpose, senior banker and Co-Chairman of the ASSOCHAM National Council on Banking and Finance Mr R K Gupta said.

“Banks on their part have also started carrying out proper due diligence, robust credit appraisal and monitoring system to avoid any further slippages. It should be kept in mind that the huge slippages leading to higher provisioning will add to the bottom line of the Banks whenever these NPAs are recovered,” Mr Gupta, who is also Executive Director of the Bank of Maharashtra said.

He said phasing out of regulatory forbearance with necessitated capital requirement of banks has been a welcome move. “RBI and the government have laid    mounting emphasis on absolute objectivity and greater transparency in asset classification and provisioning in consonance with recoverability, realization probability,” Mr Gupta said.

Such issues have also been deliberated at the ASSOCHAM National Council of Banking and Finance.

“The stringent measures of close monitoring through early warning signals, timely corrective actions, prompt resolution responses, matching concurrent sacrifices, instant provisioning and unlocking of impaired assets in time will impart sound grounds for healthy banking in India. A string of strong proactive actions will definitely go a long way in strengthening of banks in general and PSBs in particular,” Mr Gupta said.

He said a synchronised wavelengths between the government and RBI are beaming rays of hope for distinct intended improvement on paramount parameters of operating economy in not too distant future. “Salvaging, retaining and improving the economic value of the stressed assets remain the hallmark of swift measures put in place by RBI”.

RBI has been keen to revisit the effectiveness of measures from time to time .Be it regulatory forbearance in the form of CDR or SDR, be it preventive CRILC or remedial sale of assets mechanism …all promising symptoms of emerging sound economy”.