The recent move of the CBI to investigate actions of banks lending to companies is discomforting at the least. Banking is and always has been a business of risk. Sure, banks can measure, control and regulate their exposure to risk, but there is an inherent element of risk that they cannot escape. With the CBI (the countrys top investigative agency) breathing down the necks of bankers, it will be more difficult for companies to get loan approvals and will ultimately lead to the demise of the debt availability for large companies. It is already almost dead for small and medium businesses, that need to pledge huge assets to get any sort of loans. The CBI needs to spend its time investigating many other places rather than bother between the banks and the companies. As to the problem of NPAs and bad loans, the RBI and the Banking Ombudsman are empowered to put in place regulations and monitor those on a continuous basis.
Posted on: Tue, 12 Aug 2014 04:47:36 +0000
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