Why is no one talking about the Rs 9,22,000 crore in bad loans that public sector banks have piled up over the years? Why is no one angry that banks are not doing enough to recover those loans? Why is no one talking about how banks throw good money after bad? In the end, the banks might have to write off the loans and we the citizens of India will have to foot the bill. The quantum of bad loans has been rising and while the erstwhile UPA government calmly swept it under the carpet, it was former RBI governor Raghuram Rajan who got tough with banks. Now it seems the Narendra Modi government is keen on pushing banks to get rid of rotten assets. The government has come out with a three-pronged solution to the problem, which if not implemented could eventually undermine the stability of banks. The quantum of loans lent to Kingfisher Airlines, which eventually failed, gives one a clear idea of the unholy nexus that exists between businessmen, bankers and politicians. And this could be the case with many more loans. The Centre must evolve a system for greater scrutiny of banks, more transparency and an effective way of recovering loans.
