http://www.financialexpress.com/news/banks-misguide-investors-on-loans-sbi/967922/0
Reserve Bank deputy governor K C Chakrabarty today flayed banks for attributing their sudden fall in profits to the computerised system of recognising bad loans and said this is tantamount to misguiding investors.
Reserve Bank deputy governor K C Chakrabarty today flayed banks for attributing their sudden fall in profits to the computerised system of recognising bad loans and said this is tantamount to misguiding investors.
"You have misguided your investors for the past five years by not giving your proper NPA (non-performing assets) figures," he told a banking technology summit organised by the industry body CII here.
The senior-most deputy governor who oversees the banking services at the monetary authority, also wondered as to how an inanimate object like the "system" can generate NPAs and said the markets regulator Sebi should look into this issue.
"Should not the (markets) regulator (Sebi), who is dealing with listing, take action against banks?" he asked.
Wondering how even after computerisation, banks are unable to identify NPAs, Chakrabarty said, "so long as system-generated NPAs were not there, was the computer giving wrong figures?"
The deputy governor's comments come in light of a slew of banks, especially the state-run ones like Central Bank of India and Union Bank of India, among others, reporting massive dent in their profits and attributing the same to migration to the system-generated approach of identifying bad loans, over the last fiscal.
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