Pass­ing the buck?

Gfiles - - ...BY THE WAY -

De­mon­eti­sa­tion, the Chanda Kochchar con­tro­versy, ab­scond­ing Vi­jay Mallya and the im­pact of the Nirav Modi case has slowly started per­co­lat­ing down the line in the bank­ing in­dus­try. The lend­ing sce­nario in the banks is the low­est in a decade. Given ris­ing bad loans and NPAs, the pub­lic sec­tor banks are now be­ing ex­tra care­ful which is re­sult­ing in low credit off­take. The Re­serve Bank of In­dia and the Depart­ment of Bank­ing may present a rosy pic­ture of the in­dus­try but the ground level sce­nario is dis­mal. Bank Chair­men and Man­ag­ing Di­rec­tors of most PSU banks are scared and not push­ing the lend­ing busi­ness. Nor­mally, the Zonal Man­agers and Bank Man­agers are the nodal of­fi­cers for the off­take of the lend­ing busi­ness and are con­stantly under pres­sure to meet lend­ing tar­gets. In the cur­rent sce­nario, the smart man­agers have evolved a new modus operandi. When­ever any busi­ness­men or com­pany ap­proaches them for loan or bank guar­an­tee, they tech­ni­cally start pro­cess­ing the pa­pers but tac­itly de­lay the process. In the mean­time the de­tails are re­port­edly passed on to pri­vate banks. The pri­vate bank ap­proaches the loanseeker and of­fers them quick sanc­tion with­out any has­sles of sub­mit­ting in­nu­mer­able doc­u­ments–for a price. The ‘booty’ col­lected is shared by of­fi­cials of the pri­vate bank and the pub­lic sec­tor bank.

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