Given the surge in non-performing assets (NPAs) as well as restructured assets of banks, along with the fact that many defaulters appear to carry on living opulent lifestyles, this does suggest there is more than just an element of malfeasance in the process. Indeed, at a conference in the capital, this is precisely what the CBI chief Ranjit Sinha has suggested, while giving details of the rising fraud cases in banks. While it is Sinha?s job to catch fraudsters, and he is right in asking banks to report such cases in time, it is important to keep in mind the other side of the equation.
As former RBI Governor C Rangarajan pointed out, the slowing economy is a big factor in accounts turning NPAs. Similarly, the fact that the government has not been able to clear coal linkages for instance, for power projects banks have lent to, have been another reason for the hike in NPAs. Catching fraud is the job of the CBI and bodies like the CAG, but they cannot ignore economic logic. Indeed, that would also help them do their jobs better.