From the Editor's Desk

Bankers are not Slaves

Bankers are not slaves

When loans are sticky, why are they accused of wrong doing?

Commercial banks are sitting on a huge pile of bad assets, which some estimates say is as alarmingly high as 15 per cent of their assets. Though bad loan is not unusual in the lending business of an institution, overwhelmingly big size defaults by a handful of borrowers, especially through defrauding are not usual. There are two reasons for this menace; the first one being external, which is out the borrowers’ control and the second one willful defaults. While willful defaulters should not be spared, the former category has to be looked into seriously for mutually winnable solution.

But now there is a strange situation. Defaults are being found to be the result of favouritism and nepotism, which are forbidden in the case of banking business since every bank lends money that it owes to its depositors. Strangely, but shockingly and truly, bankers who cleared large proposals, which are now in the sacks of bad loans, are not the actual culprits, though they are supposed to be responsible for the gaffe. The blooper lies in immoral control of government over Board of Directors and chief executives of banks, who are still considered subordinates of ruling politicians and ministers. When things go wrong the politicians disappear from records. Their direction is untraceable, since no banker keeps phone records. Even if it is traceable it has no accountability and bears no proof for bankers who are under suspicion and facing actions to pass the buck.

A lender cannot or is not supposed to move even a fraction of an inch if a proposal is found unconvincing, ineligible and/or suspicious. It is like playing with fire that can blow up the entire institution. Putting pressure on them to act on some others’ will to take such an extent of risk is like bringing compulsion on them to rebel against their own conscience. That is no less than an action of imposing miserable slavery on them. Bankers are trained in handling credit business and none is better than them to run it. They cannot be made slaves of ministers and scapegoats for some one’s mischief.

Many bankers were reportedly against many of the large proposals that have been proved sticky later. Then who are the actual culprits behind the mess? The whole world knows. There were top officers who were in deep perplexity when ineligible proposals came to their table for favourable actions quickly. Today some are under investigation and many are embarrassed by the manner the investigation is carried out. Bankers can only be deeply demoralized by such actions rather than opening a way for cleaning the books of sticky assets, which is the ultimate intention. Let the bankers look in to the mess for a solution, which they are capable of except in those cases where there were directed lending. They are capable of recovering a large part of the bad loans, if they are given free hands and, of course clean the books, if they are given sufficient time.