Ad Here  
Whistle-Stop Tour of Raghuram Rajan Nuclear power at the nucleus B H Kothari - a tribute China invests in India S Ramanathan – a versatile musician, musicologist Welcome GST An enemy’s enemy is a friend TELANGANA at last…BUT Cement prices continue to rise… Air Asia India will set new benchmarks for budget travel Shanti and Sadhana through Music A proud Madrasi Colour-Chem’s colourful KRVS Welcome thrust on trade in Modi’s foreign visits... A friendly business group Inflation: are we emulating Argentina and Brazil? Wanted: a second airport for Chennai Mersal magnified A rich pool of talent not utilised…. When TN politicians can emulate Kerala's Parliament in paralysis... The why of tax incentives Why this malaise in medical education? Make standards certification mandatory... Robber barons everywhere Solar, solar everywhere … Tribute – Manikam Ramaswami Banning booze... Moily’s bold thrust F C Kohli - his concerns all embracing When the President was rendered homeless… CSR and CMI: promise of another Srinivasan Ramanujan... He saved millions from starvation... Kulandai was a giant Breaththrough in malaria control The Jan Dhan bonanza Tough task taking states together TN – agglomerate land holdings without alienating ownership TIAM turns a full cycle A think tank for Chennai Build close rapport with business leaders S V Raju – a ‘good’ true liberal Tatas moving out of urea production... Vibrant Gujarat Sweeter prospects for sugar Tribute – UCAL Selvan… Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Tribute – M V Murugappan Odisha: spectacular win by Naveen Patnaik Secularism and anti-Hinduism Silver Years of Madras Musings Streamlining mandatory third party cover TN-leverage strength of BHEL, NLC... Poor quality of university VCs Polls and promises More Shakti to resource mobilisation... How Air-India loses customs... Which side are you, Montek? CII projects higher growth… Sweet news for TN sugar mills Tatas moving out of urea production... No Maha Koottani in TN... Adapt Vajpayee dinner diplomacy When online building permits work…. No engine for this car GNS - 100: our first subscriber Haul over the coal For whom the MIDS bell tolls? A yen for wastage… When small is no larger beautiful.. A glass full of corruption IPL - no surprise this scam Measuring roof tops in terms of KW/MW EEC at the National Media Centre Sri Lanka votes for change Maximising the micro pricing … Naidu will soon build a new Hyderabad Computation of GDP – conundrums continue Fall in crude prices help in oil sector reform Five star activism stalls development activity Rahman at CIC Liberal imports idling indigenous capacities Tribute More tributes to GR Quality silica from Neyveli When Ratan Tata visited SRM L&T: focus on infrastructure and more infrastructure… Auto components surge… Shipping woes of Chennai companies Rs.1600 crore paper board plant of TNPL Why land prices zoom in TN? More Shakthi to Das’ elbow Discoms deserve better… Where a state respects its litterateurs… New IT products of Ramco in the pipeline… Another Indian music maestro at the UN to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Muffled voices for merit… Alexa – Talking Wikipedia Welcome changes that testify to Jayalalithaa’s return to health No mega rail project for Tamil Nadu The brown list of Venkitaramanan CRS, a jewel among managers, is no more. Plummeting profits of PSBs ONGC at KG Basin Music happens London, London Narayan For whom the bell tolls? Focus on quality of power - its only around 170-180V When nations steal growth from one another… Fortune for Indian Airlines Readers' Mail Valli, they are more marginalised Convulsions in The Hindu Delhi returns to BJP SoA @ 80 A professional at the helm of IRDA... Shaming of Tamils by Tamil farmers at Delhi Tihar, Puzhal not different from Parappana Agrahara He continues the focus on social amelioration Lesson from Chandrababu Naidu Gas is the way forward Limit foreign borrowings to hi-tech, export potential projects... Welcome focus on core competence Russi Mody – a tribute The ‘Ayyo-yes’ is no more MHC should not return to its old indisciplined ways West Bengal: mindless malignancy Making ‘my Amaravati’... Recognition to role of NBFCs.... Delhi Chalo... IPL type auction for VCs? Eternal support for capitalisation of PS banks Boy, can you beat these? Roaring Ro-Ro facility Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai Marketing expert Balagopal is no more R Sridhar steps down as CEO of Shriram Capital Telangana in top gear… Contrarian cousins Revive development banks... Permanent secretariat for TN GIM Tax agriculture Remembering Indira Sivasailam... Towards speedy justice Wise Presidents CIPET hqrs to stay at Guindy – for the present? TGS- The king storyteller Don’t seem to feel the pulse… The Swadeshi Trump Reliance’s TV – 18 ready to launch Tamil News Channel Airlines in India: cost and space Fortune 500 review Scientists urged to take up farmer-oriented research Return to king coal for urea... Infrastructure funding – lessons learnt The power-full Hindujas L&T- the specialty of special purpose vehicles Revving up the manufacturing sector Medical costs hit the roof... Naidu’s return augurs well for Seemandhra A welcome initiative by the judiciary Land reclamation from sea appears cheaper! Should we change the official year? The Gulf aviation boom Fuel for thought Godspeed, Chief Minister JJ Quality education through the PPP mode IAS invades NDDB... Diamond jubilee of Egmore Samskrt School Insurance companies bleeding, yet no decision on increasing FDI limit! PPP mode for upgrading Corporation Hospitals Come elections, come advertisements... Funding the un-funded The few handicaps... Align crops to agro climate endowments… The rise and fall of Annamalai University Demise of a media baron... Noble nonagenarians... A more liberated TN… Put expensive assets created to use... Lalu’s envy, India’s pride Road development slows down Mu Sigma – is no more A Grand Finale for SN’s MS centenary at the US… Protest masters... Excel Generators provide the vital back-up TN accounts for the largest recruits by the IT sector Like Hinduism: many paths to reach God... Strengthen the base... Poor representation for Kerala and TN in Cabinet Delhi is distant… Pharma – overdose of copying WTO Meet: resolved to meet again Of course, Gujarat is vibrant Kinetic Karnataka An informal presentation - analytical, forward locking... There was flood of milk. Reason: no milk commissioner! Dr C Rangarajan returns to Chennai Delhi is distant PC’s preference for professionals Waning interest in public discussions… Not just in-laws (and outlaws); they’ve renowned academics at the helm! Multi-faceted Venkat A C Muthiah – his munificent bequeaths to science EVM is tamper-proof This scant respect for Law Things happen by accident and not by design... GM Technology at last! Building loyalty through the stomach Bihar elections - the Rajaji formula worked The balancing act The ‘Jayanthi Tax.’ Adharma of opposition politics The nuclear option Preserving for the future …and of a popular trade leader A Grand Finale for SN’s MS centenary at the US… Bihar – Nitish Kumar adopts the Lalu model Small units prefers to remain small... Padma Bhushan for A Ramakrishna Editor's Says Solar thermal shines… An inexplicable neglect The sea- saw battle continues... Gay abandon in pricing The Ports’ Pasha expands into Tamil Nadu Modi storms Silicon Valley Shale gas and its shallow future Cutting the nose to spite the face Engineering seats go abegging Online not in line with brick and mortar businesses... Cleaning Ganga – relocate tanneries and install electric crematoria Kudos to NDTV... Increasing non co-operation of state leaders Modi and the lady The star of Spencers is no more Paytm karo... Where is Rajaji? The rise and rise of KCP More heat than light Intellectual of rare qualities All eyes on Sankara Nethralaya Editor's Notes
Eternal support for capitalisation of PS banks

The NDA II government has initiated action against eight chairmen and managing directors of public sector banks finding serious irregularities associated with them. These relate to several questionable actions like spike in NPAs' bad recoveries...

IE has been pointing to the deficiencies in the system of thrusting CMDs and EDs on banks on industry- wide seniority. In such a system one noticed an ED of a bank posted as the CMD of another over

limited tenures of a maximum of five years or retirement earlier on superannuation. IE has pointed to unsavoury practices by the experience of Indian Overseas Bank. This bank had for years the CEO thrown up from the ranks accumulating the work culture of the bank as also its clientele. Those brought from outside took time to find the roots. Ambitious bankers like M Narendra used the position on self-promotion. These included carrying the favour of the Union Finance Minister, the Minister of State for Finance, and the deputy governor Reserve Bank. The bank even celebrated its founder’s day in the capital. New publications on the history of the bank were produced. Like M Gopalakrishnan of Indian Bank earlier, credit was dispensed liberally. It should not, therefore, be surprising that the bank leads in the matter of NPAs. The second quarter results show a staggering 29 per cent increase.

There are reasons to suspect lapses just due to suspicious deals too. A chartered accountant specialising in banking deals narrated this incident:  sick company with huge bank debt sought the assistance of this chartered accountant. There was accumulated debt of around Rs 10 crore. The CA established contact through some intermediaries with a high profile politician having close links with the North Block. A deal was struck, whereby a settlement was made for less than half the amount due. A hefty fee was paid in cash through carefully delineated channel to this high profile politician. The CA said that such settlements were legion. The powerful Congress politician had huge incomes on such settlements, impoverishing the banks.

Bank chairmen adapted the noblesse oblige policy and expected due favours from the boss at the North Block. The appointments of chairmen of banks were done on an arbitrary manner through an opaque process as happens in appointments of vice chancellors of state  - run universities in Tamil Nadu.

The NDA government has announced a transparent system in the selection and appointment of chairman and executive directors of public sector banks. This needs to be commended.

Yet another welcome step by the Modi government is the plan to offload shares in excess of 51 per cent. In the present boom in the stock market, such a measure can help banks raise the needed resources for increasing the capital in accordance with the Basel norms. It is unacceptable for public sector banks to look for the government to capitalise them eternally.  Large private banks like HDFC and ICICI raise the needed capital on their own. Modi would do well to proceed with the plan to reduce state ownership to 51 per cent, to start with and progress to 26 per cent in due course. In this process he should ensure that such large institutions would stand on their own.


Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236