How the people and their representatives ruined the Indian banking system – 2
Indian banks today are examples of sloth and complacent customer services. They all have good nice businesses. They seldom care for the customer or the client. Private Banks too are not very far behind the government banks in mistreating or looking down upon their so called valuable clients. So how does that kind of psychology happen? Most importantly what’s the role of the people and government in this insensitivity of Banks?
One reason of course could be the United Progressive Alliance’s policies. Led by Dr. Manmohan Singh, it favored loyal party cadres to the posts of bank directors. Like Anusuya Sharma (United Bank of India), Maj Mrs. Krishna Mohini (Punjab and Sind Bank) , Abdul Rashid (United Bank of India) , Praveen Davar (United Bank of India), Vinay Kumar Sorake (Syndicate Bank), KK Sharma (Punjab and Sind Bank), Umesh Kumar Sharma (Punjab and Sind Bank), Paban Singh Ghatowar (United Bank of India), Rani Satish (Union Bank of India), Omen Moyang Deori (Uco Bank), Harcharan Singh Josh ( Punjab and Sind Bank), Shobha Oza (Syndicate Bank), MN Kandaswamy (Indian Overseas Bank) , P C Zoram Sangliana (United Bank of India) and others. The one important qualification that was seen in them was their immense loyalty and hard work they put in for the Congress Party. But does that make them efficient directors too?
In many cases, bank officers have been allegedly pressurized for not auctioning properties of those who did not pay their loans back. Instead they were asked to settle for terms which were unfavorable to the banks. But not many such complaints have come into the public light. However if the NPA figures of the banks are of any measure you can see that there is definitely a system of favors by banks to certain select individuals.
Former cabinet minister Pawan Bansal, a close aide of former PM Singh, himself allegedly, got his Chartered Accountant Sunil Kumar Gupta a directorship of Canara Bank. Interestingly soon he and his family members got loans worth crores of rupees from Canara Bank. Now of course, the issue could be just an ethical one and have no legal basis. Still it begs the question about how people are encouraging such candidates. What about their ethics?
Also, the question of shareholder activism arises here. How can any government push a favorite candidate for a job which needs technical expertise? This where there are large number of shareholders. It calls for the accountability of not only the banks and their systems, but also of the public that owns these banks. Obviously, it is this same public which in a way owns the government too.
"The bank has suffered in the past due to reckless lending because of political interference and an obliging management, which resulted in accumulation of highest NPAs in the industry. If the Government wants this bank to survive, the bank should have directors who are not only professionals but also men of integrity and not connected with local politics." – RP Singh, Former CMD Punjab and Sind Bank