NPAs bane for banks
Apropos the editorial ?Vijay Mallya, defaulter? (FE, September 8), is there any material benefit of declaring a defaulter as a ?willful defaulter?? It is only a more intense word for a defaulter. What must be done by the banks is to shore up the screening mechanism before granting loans and prevent the turning sour of the loan before it turns into an NPA. Gradual sanctioning of the granted loans after a thorough watch on the performance and blowing caution whistle earlier on noting the decay are the essential steps of prevention. The clear need is to shun indiscriminate lending to infra projects, which involve huge amounts, since it impacts the liquidity of the bank. Problems in recovery due to political pressure are bad for the health of the banking sector.
NR Nagarajan
Sivakasi
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