Rajan took many steps to put banking system in right direction: President

Rajan took many steps to put banking system in right direction: President

Chennai (PTI): Just retired RBI Governor Raghuram Rajan’s clean-up of more than USD 100 billion of stressed assets on the books of banks today came in for praise from President Pranab Mukherjee who felt rising NPAs are not a desirable situation.

“Of course more than often you listen to NPAs of banking system, which is no doubt a matter of concern. And Governor of RBI who has just retired, Mr Rajan, took many appropriate steps to put the system in the right direction,” he said at the centenary celebrations of Karur Vysya Bank here.

The stressed advances to gross advances of scheduled commercial banks have increased from 10.90 per cent in March 2015 to 11.40 per cent in March 2016, he said, adding the aggregate provisions for NPAs has increased from Rs 73,887 crore to Rs 1,70,630 crore.

Also, net profits of the banks have come down from Rs 79,465 crore in March 2015 to Rs 32,285 crore in March 2016, he said.

Rising NPAs is “not a desirable situation,” he said, adding those resources must be available for commercial disbursement.

Rajan, who completed his three-year term as Governor of the Reserve Bank of India on September 4, had forced banks to recognize the true state of their bad loans. This culminated in a six-month asset-quality review that led to banks reporting a surge in bad-debt disclosures and higher losses this year.

Mukherjee said Indian economy and its banking system has done reasonable well considering “indiscretion of a private bank (abroad) could create such an international financial crisis from which world is yet to recover.”

Forecasts of the IMF and World Bank are revised and re- revised year after year because world economy is hit by one after another crisis and overall performance of major economies of world are not so bright and prosperous, he said.

“Everybody at that point of time pointed out that when the major banking institutions in international arena were suffering, Indian banking system stood firmly and solidly because of its prudent management not indulging in some sort of profligation. I am happy to note that because of the basic foundations, and strength of our macroeconomic indices, Indian economy is doing reasonably well,” he said.

Bankers trustees of depositors’ money: President

Chennai, Sep 10 (IANS) President Pranab Mukherjee on Saturday said bankers are trustees of depositors’ money and urged them to be prudent about non-performing assets (NPA).

Speaking at the centenary celebrations of Karur Vysya Bank Ltd, Mukherjee said bankers should remember that they were trustees of depositors’ money, and it is their sacred responsibility to protect the money of those who have reposed trust in them.

Mukherjee said a growing economy like India needs credit expansion but the provisions for NPA has reduced the resources for credit disbursement by commercial banks leading to an undesirable situation.

He pointed out that stressed advances to gross advances of scheduled commercial banks have increased from 10.9 per cent in March 2015 to 11.4 per cent in March 2016.

According to Mukherjee, who was Union Finance Minister before he became president, the aggregate provisions made by all scheduled commercial banks have consequently increased from Rs 73,887 crore for the year March 2015 to Rs 170,630 crore for the year ending March 2016.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here