Securitisation etc vs Erosion of Capital – written by Ankit Bhatia


Good evening all !!

Well  ..  though, I concede, as all anticipations and conjectures would have prognosticated, all March scribbles would be demonstrating a close theme proximity with – fiscal bills, provisions, deficits, legal implications of bills, etc – being in the vicinity of February 29, I have been prompted to pursue an aberration !!

May I   :)

Inadvertent its been, though, however, inadvertent perusal of certain obnoxious fiscal developments prompted the ingrained investment banker / blogger in me – to dedicate a scribble on NPAs, public sector banking institutions, their redundant non vigilant diligence systems, consequent exasperating erosion of value of our public capital etc crucial issues – which, though extremely crucial for the economy as a whole, however, inferring from current economic scenario, it is (perturbing) apparently residing in oblivion cache of policy-makers. Blunder-some ! Or deliberate ??

Its indeed not at all a discovery that the financial / banking sector, in any economy, is an extremely crucial barometer, as well as synonymous, of growth meter and well-being of the economy ! The synopsis of activity, balance sheets, state of affairs and consequent health of banking, financial system of any economy – indicates the rate, well-being, acceleration or impediments in the economic growth or economic activity or consequent demand or slowdown – in any jurisdiction of the world !! The whole vicious circle of credit, economic activity, return, all initiate from financial institutions.

However, despite the aforesaid significance, & especially the deployment of public capital in incorporated public sector financial institutions, it is perturbing to be a passive spectator to perturbing developments in this crucial sector, NPAs, lack of diligence evaluation systems, seemingly political interference in management, not incorporating enhanced fiscal prudence review systems / controls to ensure a prudent vigilant culture / decision systems in the sector.

Solicit perusal of the perturbing developments :
Twenty-nine state-owned banks wrote off a total of Rs 1.14 lakh crore of bad debts between financial years 2013 and 2015, much more than they had done in the preceding nine years. – Indian Express