Yesterday another measure to boost the economy has been mooted by the Government. It will recapitalize (read infuse more capital into) the ailing Public Sector Banks. On the face of it, it is difficult to criticise the move. This is evident from the fact that none of the opposition parties have made any noise about it and there has not been much of negative noise about this in the media.
The reason for this bailout has been because of all the Non Performing Assets that has been gathered by the banks. Some of these are due to rank bad business calls, many of these are loans provided to the rich and powerful.
While it may not be bad idea to give a one time bailout, the processes of these banks need to be strengthened so that the banks do not accumulate any further NPA, if not clear the existing one. Transparency should be brought into the system.
One way would be make it mandatory to make public any loan application made by public figure (this should include any elected person at any level in the government) or to any large corporate is made public. This will at least give a chance to some of the alert citizens and the media to raise an outcry if it seems a risky loan.
Removing the multiple intermediaries and bringing in transparency in final pricing of the agricultural produce will bring more returns to the farmers and will reduce the need for them to take loans and even when they take they will be financially healthy enough to repay. Teaching them to leverage the commodities market (after kicking out the speculators from trading) will further enhance their financial stability. They will also now be willing to come under the income tax umbrella.
Hope we get a honest and courageous enough Government to clean up the present system.
The reason for this bailout has been because of all the Non Performing Assets that has been gathered by the banks. Some of these are due to rank bad business calls, many of these are loans provided to the rich and powerful.
While it may not be bad idea to give a one time bailout, the processes of these banks need to be strengthened so that the banks do not accumulate any further NPA, if not clear the existing one. Transparency should be brought into the system.
One way would be make it mandatory to make public any loan application made by public figure (this should include any elected person at any level in the government) or to any large corporate is made public. This will at least give a chance to some of the alert citizens and the media to raise an outcry if it seems a risky loan.
Removing the multiple intermediaries and bringing in transparency in final pricing of the agricultural produce will bring more returns to the farmers and will reduce the need for them to take loans and even when they take they will be financially healthy enough to repay. Teaching them to leverage the commodities market (after kicking out the speculators from trading) will further enhance their financial stability. They will also now be willing to come under the income tax umbrella.
Hope we get a honest and courageous enough Government to clean up the present system.
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