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Ruing the RoC ruckus
Your editorial ‘RoC ruckus’ (Oct 30) has not come a day too
soon. The state of affairs at the Delhi RoC has been terrible
since a very long time. I have personally experienced it, as
a practising chartered accountant. Nothing moves without gratification.
You cannot get your name application approved without approaching
the RoC for obvious reasons.
In the name of amendments in memorandum etc, one has to come
across the ubiquitous babu. Even a simple task of revalidation
of a transfer deed can be harassing to no end, if you leave
it to be done on its merits and as per the rule book. It is
high time that such government departments are exposed before
the public and this government whose head proclaims that his
government shall be sensitive and responsive to the general
public.
— Raj Kumar Goel, on e-mail
Woes of PSBs
AS reported in The Financial Express dated October 13, the finance
minister has exhorted public sector banks to come up with innovative
schemes, such as Citibank’s Suvidha, and not rely on size alone.
Indeed, size does not matter. The sooner our PSBs realise what’s
good for them and the economy, the better it would be for us
all.
At present PSBs are burdened with huge staff costs and non-performing
assets. Worse still, the companies to which they may be interested
in extending advances are not interested, because of the higher
cost of loans as well as latent expenses. The PSBs’ behaviour
vis-a-vis prospective and actual borrowers must improve.
— R L Bhasin, on e-mail
Universal banks
Universal banking comes in handy for financial institutions
in the cover up of their loan and investment losses, not in
tackling the real problems on account of which their financial
positions have deteriorated. If after more than four decades
of existence these institutions have been unable to hold their
own, despite enjoying tremendous pull with top industrial houses,
it is unlikely that any meaningful purpose would be served in
their becoming universal banks, that too through the reverse
merger route.
At the most, the move may end up camouflaging the bad loans
and past sins of FIs and pulling down the well-performing banks.
Instead of the subsidiary lifting the parent and boosting its
scale of operations, the parent company is pulling down its
outfit along with it.
FIs should have been able to present a healthy picture of their
financial standing which would have enabled them to absorb at
least their own outfits. Now, well-performing banks will be
made to subsidise mismanaged FIs. It is painful to note that
FIs which have not been able to manage large volumes of loan
assets are trying to become universal banks to handle still
larger volumes and diversified business transactions. Isn’t
the whole always bigger than the sum of its parts?
What is the guarantee that universal banks would perform better.
The ideal situation would have been to clean up the FIs’ balance
sheets before attempting to merge with or take over large banks.
Universal banking should not be allowed to enable FIs to shove
their problems under the carpet. This should be made clear by
the Reserve Bank to the FIs.
— R S Raghavan, on e-mail |
