Private Banks More Cautious In Lending

Are there any issues with Private Sector Banks?  Yes of course there are…..

1. ICICI Bank Controversy
2. Axis Bank’s chief cutting short her tenure
3. Decision that were routine in nature a few months ago are being delayed
4. Bankers have now become cautious in signing even a single paper
5. An IT solution provider who was sanctioned a loan but not released since questions on their credit rating has come to surface now.

result is….. the private sector banks have now become more careful in making fresh loans, which is already in place in the PSU Banks, due to the recent corruptions and ongoing investigations.

Things to be watched:

• It’s premature to conclude that this careful approach, at Private Banks, will slow down the credit growth, of course this being a critical component of India’s economic revival.
• Private Sector banks will now pay more attention to loan feasibility.
• Banks will be careful to run the processes and ensure strict checks
• Another source adds that Banks will now be taken through a transition where processes will be checked again.
• A process of Self-Analysis is expected to be undertaken by banks, paving way for the healthier banks go ahead.

Concerns:

1. Bankers are put to investigation even after retirement which indeed is a very sorry state of affairs.
2. Banking profession has now become highly risky and people are afraid of choosing banking as a profession.
3. The latest addition to the frauds and manipulation of funds is seen at UCO Bank whose chairman has been inducted on allegations on a defrauded case of Rs. 621 crore for siphoning and diverting bank funds.
4. Charges framed against the officials, proves that there is lack of understanding. Lending cannot be stopped which is the main activity of banks.  Creating belief in public mind is the need of the hour.
5. It is essential to identity true borrowers and customer education is also equally important in the lending process which is missing today.

It is therefore essential that banks should rise up to the occasion and ensure that strict lending norms are maintained and true customers are encouraged, which would along keep the economy growing.