Corporate Bad Loans: Dubious Assessment, Rampant Diversion of Funds and Meaningless Guarantees
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- Опубліковано 29 вер 2024
- Indian banks, especially public sector banks have poor processes for monitoring the use of funds and the guarantee process is downright dubious. Watch this week's video as Sucheta Dalal takes a look corporate bad loans.
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Suchetaji isn't it pretty obvious that this is due to rampant corruption among these bankers? They are not stupid for sure not to know that many of these loans given are "designed" to go bad. They are not saints either. My guess is that many of most of these would have involved kickbacks to the approving officers in the bank and their seniors. Each of them should be investigated, in my view.
Collusion with Politicians who are also beneficiaries of the Loot is apparent.
Honestly though congress lost power The first FM of BJP was for all intent and purposes a congress FM Instead of cleaning up he allowed things to fester. It is unfair to blame him as he is no more the overdepedence of the first BJP govt on Mr A jaitely was a major reason for prolonging and worsening the npa situation I recall the way he acted to CHANDA KOCHARS ARREST
Unless there is a stringent CIBIL mechanism for corporates, proper Debt to Equity ratio balancing things won't change. Come to retail banking, miss an EMI, and one is barraged with calls, messages, emails. Subsequently every week there will be recovery agents knocking your door. On average, even after 6 months of missing EMIs, in a lot of cases, the total amount won't exceed 25k. I'm not recommending anyone to default but I am just highlighting the way the system is geared against the common man.
Wait - on second thoughts, how about a borrowers consortium and hold back the EMIs. Hold back all EMIs until there is serious tangible action on defaults. If you want to write off billions of corporate debt from taxes collected from the common man, you have to make provisions for the common man.
Agree with you
Wow what a great idea. Because some one else don't pay, I am also not paying
@@jacobthomas6504 I don't pay and keep the money in escrow. If I pay, banks and governments take my money and hand it over to corporate frauds. If I don't pay, I get harassed and they go Scot free.
This strategy will only work if there is mass adoption. Nobody is encouraging loan fraud at retail level.
Those people who are comfortable getting harassed by loan recovery agents can do what they want. But if we want banks and governments to get accountability, a mass EMI stop is the only way. All EMIs placed in escrow and only to be released when there is genuine efforts to curtail corporate loan frauds and tangible recovery of outstanding loans
In the past it was assumed that most crooks and criminals came from the poorer sector of society, and understandably so, given their difficult upbringing and life. The most disturbing scenario in the past two decades is the vast rise in white collar crimes and the sheer greed of people in power. The Chanda Kochhar case is also another one in the same genre, Winwind and other cases highlighted by Ms. Dalal is in the same group.
That's bcoz of education Eduated robbers or White collar criminals have nothing to fear of law are unaware of their karmic account. While in villages to this day that remains by nd large even if theydon't have functional literacy
What you have described is quite disturbing. Certainly there is scope of improvement in sanctions and monitoring of high value corporate loans. But I must say that you are looking only at bad apples and rotten tomatoes. The overall scenario in the banking industry has vastly improved and the wheels has turned. Riding the credit growth, banks are recording higher income and profits never seen before. The heap of bad loans is shrinking and the provision coverage ratio - or, the money the banks set aside to take care of bad loans - is pretty high. On top of that, most banks are well-capitalised. The 12 PSBs together declared net profit of Rs 25,685 crore in Q2FY23 & total Rs 40,991 in H1FY23, up 50% & 31.6%, respectively (y-o-y).” At Rs 32,150 crore, the private banks’ net profits are up 64 per cent, year-on-year.Moreover there is growing realisation among banks that they cannot depend on high value corporate loans to fuel their credit growth. For example, for IDBI Bank loan book composition of retail to corporate advances improved to 63:37 as at end-March 2022 from 62:38 as at end March 2021. For SBI this ratio is 64:36. IDBI Bank"s Provision Coverage Ratio as on 31-03-2022 is 97.63% and its PAT is RS.2439 crore. ( It is still counted as a private sector Bank). Thus, almost all NPAs have provided for. A potential buyer looks at the future and not a the past. Many suitors will follow when sale of Govt and LIC"s stake takes place and both the Government and LIC will enjoy handsome capital gains on their investment in IDBI Bank. NPAs are part of banking industry everywhere. Only thing is to gauge is the scale of such NPA generation, which is quite high at this stage and needs vast improvement. But when the prudential norms, introduced in 1992, had a shocking impact on the banks in the previous century. By March 1994, before the first set of new private banks came on the turf, the gross NPAs for all scheduled banks was estimated to be 19.07 per cent and the PSBs had even higher - 24.8 per cent. So this is not unusual. Undoubtedly, the government has invested more than Rs.3 trillion to take care of recurring losses due to high NPA generation. The crucial question to be asked : Is it loss to the public exchequer? NO, if the current value of the investment is higher than the original investment! And that seems to be the case, as stock market perception of PSBs has vastly improved due to the changed scenario. Let the government sell its stake in PSBs and bring it around 40-50% or even lower and introduce changes in style and culture of the management of these banks.. Not only that the government will earn handsome gains, we shall see a vastly changed banking industry.
As long as disbursement is incentivised and the Managers review depends on how much he/she lends..vis-a-vis disbursement which are recoverable this will go on. Totally unaccountable staff. Especially in IDBI bank
Government Banks don't invest any money in their training of staff, its very easy to cheat these people plus lack of specialization adds to the problem.
Accountability of PSU Banks is very important in India and Indian FM is fully responsible for bad state of affairs. Indian FM is enjoying all facilities like any other Minister in India.
She does not eat onions and accountability. Therefore she is not liable.
@@srisrisri1234 seems true
So all earlier FMs didn't know about bad loans?😉
@@dineshbhasker8557 all know.. And all ignored . And will continue to do the same now
Aditya Birla Real estate fund failed miserably. Investors lost in lakhs and chores.
I don't think any govt. Is interested in fixing all these things madam
Madam
Can we file PIL in SC for staff accountability including CEO bsnks
There are many CAs who do loan arrangements professional work with these wrong methods. They could be traced with reference to fees paid to them in these cos books and certificats issued by them. They should also be prosecuted
Only solution is PSU must b privatized ASAP like article 370 ....overnight....then See the diffrence down the lane. else corporates n the MF politicians will keep playing this porn. lekin kya modi yeh karega ??
When Congis call the current day govt..suit boot, Adani, Ambani kay Sircar,
BJP hardly ever defends itself & on the contrary let all the scammers of the hook by a very slow & lethargic supreme court's.
Just saying that IDBI or XYZ bank is responsible for poor debtor management is not enough. Responsibility must be fixed on the Loan and Debtor Managers. These people need to follow the processes as dhobi check lists. The top Management must have process quality audit and not mere Financial Forensic audit. These Managers must be paid well but assigned equally heavy responsibilities. Is this just a pipe dream?
Thanks
Even documentation including securitation for loans may be of dubious quality. Utilisation certificates if required at all, could be just paper and vaguely worded. Biggest Question should be role, duties and performance of nominee directors. Seems with expansion in loans, diligence has gone down. Borrowers upto 90s used to struggle and be on feet for compliances.
Madam,you confirmed my views&experience which I gathered as aInsolvency professional.What role can we play as a honest tax payer&to safe guard the interests of our nation.Namesthe
Your heading is the nutshell of my 35 years of banking.
Unless revolutionary methodology for scrutiny and monitoring of fund utilisation by corporates comes in to effect,this loot of public money by Modanis will continue.
Assets and worth of all bank personnel involved directly or indirectly in credit decision must to undergo scientific audit. It is termite and due to no criminal case, action against financial institutions, personnel this is going to pile up in coming days looking to past experiences. All enjoyed power, position, money, incentives (indirect corruption), let public go to hell. Vande matram. Bharat mata ki Jai. Mera Bharat Mahan.
Very informative l wonder why middle class people keep their money in Bank instead of investing long term in stock market (lndian Economy)
Mam, thank you for exposing these scams. You are being the only channel doing it, can you run a Series by showing company by company case study of frauds. Obviously, bank managers are in bed with these businessmen.
Big loans are sanctioned by board of directors many are political appointees, not bank managers
While we agree on all counts with your analysis, let us not forget about the policy flipflops like in telecom or inactions in power sector which resulted in billions of dollars investments turn bad both for promoters and bankers.
Yes, Accountability must be established in all these cases...And whole system of approving & monitoring guarantees, monitoring the fund diversion and Protecting the collateral assets should be checked and re-established properly...
Congress can win the general elections on this alone buy Pappu is Pappu
credibility !!!! has just become a joke ....
Thank you for such insightful info 🙏🙏which is only provided by moneylife..You are a true journalist unlike these anchors who are mere cheerleaders for sensex
Please keep making such video s we are much enlighten ed
So why are the courts, whose judges are appointed by other judges, so keen on giving stay orders in these cases?
Great video. We appreciate the effort taken by you to bring this to us.
P s u banks must be sold
👌👌
Thanks mam
Hello Ma'am,
Ma'am what will happen of FD investors in DHFL?
Will the remaining hard earned money at least principal will be refunded or... Anything else?
🙏🙏🙏
👩👧🧍🏻♀️
No , Company is dead . All cases are closed . You will not get anything , now .
@@askme9572 I think this reply is given by one of the viewer. Thank you for replying. But I will rely on Ma'am. Let Ma'am reply. 🙏🙏🙏
👩👧🧍🏻♀️.
Only one reason for above comment.. If Sahara Group can give their depositors their hard earned money.. So Why Not DHFL Or Piramal.
Thanks mam for your efforts.
From BN @44000 may go to @50000
Madam,you confirmed my views&experience which I gathered as aInsolvency professional.What role can we play as a honest tax payer&to safe guard the interests of our nation.Namesthe
Ma'am really appreciate your painstaking efforts to bring this rot in our banking system, to the notice of the viewers.. 👍🙏
As responsible and educated citizens, we and the entire media should be constantly discussing these matters of organized loot.. done in the bright daylight...!!
Instead, what do we discuss and see on most of the news channels every day?
Love jihaad, Hizaab, mandir, masjid and what not...
Shame on us.. shame on our politicians.. Shame on those corrupt industrialists .. And shame on those bankers who have connived with those industrialists..
If a farmer does not repay a loan due to loss of crop caused by natural disasters , his land would get confiscated and he would commit suicide..
If a middle class person takes loan for a two wheeler and misses a few EMIS owing to genuine bad financial condition, his vehicle would get confiscated...
And here we have these rascals.. the wilful defaulters.. who with the help of corrupt bankers and in many cases with the blessing of politicians, can get away by not repaying loans worth thousands of crores... and on the top of it, these loans get written off and hardly recovered and so finay the citizens, the tax payers own up for the crimes committed by someone else...
Long live India.. Long live democracy... 👏👏🙏
Thank you, Sucheta, for exposing the corrupt practices being resorted to by PSBs which was thought would be pro-poor when some of the banks were nationalized. Sadly that's not the case. PSBs have only made it easy for rich crooks to play with public money.
1 U tuber Gann expert says about Time cycles
Bank Nifty to go below @10000 in coming times
He is very firm on words , Madam
Thank you for doing such a deep research and sharing the facts.
Appreciate your time and efforts spent for this.
There after
People are kept busy with polarized politics so that these issues are not paid attention to. We the people are to blame for being taken for a ride.
Sorry. Most of these loans were given during the UPA times. Ever though why?
@@subhasisghosh66 Has the gaps been closed? Or they become now legal to take BIG loans if you know the right people in power?