FINANCIAL TSUNAMI

Non Performing Assets have hit the Indian Banking scene like an epidemic. Faced with mounting NPAs  almost all the banks in India are battling for survival. Profitability has been badly mauled.  The equity market keeps on punishing banking stocks.

How did such a scenario come about?

There was a time when banks adhered to time tested norms in granting loans and advances. Loans and advances were granted only after careful evaluation. Populism of successive governments diluted the norms for scrutiny of the loan applications without any concern on the recovery aspect. It was evident that a time bomb was ticking to explode without any warning. Though brilliant critics have analyzed threadbare what has gone wrong, here is a modest attempt to view it from a different angle.

The biggest joke is the Cash Credit granted by the banks. Though it has been stated in the agreement that the account will be brought to credit at least once in a year, it never happens in most of the cases. Overdrafts are no different. Ultimately the borrower keeps on asking for enhancement every now and then. Since a large quantum of bank’s resources is tied up with the borrower the limits are raised temporarily with or without the concurrence of the controllers. Such temporary enhancements may or may not be supported with documentation. When everything goes well the branch manager is hailed for his brilliance in his achievements of targets. The branch head and the controllers are showered with accelerated promotions. The flouting of the norms is met with Nelson’s eye.

While the depositor entrusts his funds with banks in trust as long term fixed deposits, many banks have ended up tying up their funds as long term deposits in the form of loans advances with the borrowers. The interest on the advances is accounted as profits. But how much has been realized is a matter for debate.

The populist policies of the government in power made disbursal of DIR, IRDP, PMRY, Education Loans, Vehicle Loans, Personal Loans, Housing Loans and several other schemes mandatory for banks. Though these schemes ensured that money reached the poor, the middle class and the new generation rich the disbursal had never given a thought to the recovery aspect.  Loans were disbursed very often violating the time tested safety features. Branch heads were forced to disburse the loans the moment an applicant had stepped into the bank. If there had been a slight delay for making even a cursory scrutiny, the controllers encouraged the applicant to file complaints against the branch head. And if the cursory scrutiny had revealed the motives of the applicant suspect, the branch head had been taken to task for carrying out the cursory scrutiny. The controllers went on punishing the upright and rewarding those who had merrily granted the loans without any thought on the recovery.

No doubt many of the DIR, IRDP, PMRY, Vehicle Loans, Personal Loans and Education Loans, Housing Loans have ended up irrecoverable. Add these to the burgeoning Cash Credits and overdrafts where the limits are enhanced gaily, the NPAs mount threatening the banking system.

When financial discipline is given the go by, financial tsunami would envelop and destroy us.

God forbid such an eventuality. 

TAKING CARE OF OUR BRETHREN

Late Rev. Dr. K. K . Koshy  passed away on 13.03.2014. It was an accident. Just as he had stepped on to a stationery bus at Peroorkada , Thiruvananathapuram the driver had put the vehicle into motion. The hapless Achen was thrown off. A severe head injury made Achen breathe his last in two hours.

Though the Government can make doors mandatory for buses, the vehicles ply on the roads without doors. Nobody is interested in the welfare of poor passengers throughout the State. The tragedy will occur again and again.

Late Rev. Dr. K. K . Koshy had reveled in helping people in need. Roy Daniel must have been one of the beneficiaries. Roy is the Gardener at the Church where Koshy Achen had led the worship for decades.

Achen’s funeral was on 18.03.2014. The Church had never witnessed such a huge crowd of mourners before.

Roy Daniel had attended the funeral though he was unwell. He had fallen off from atop the common vault while on a cleaning assignment a couple of days earlier. It was a dangerous fall. It had incapacitated him. He could not attend to his duties. It was with great difficulty he had presented himself at the Church to attend the funeral of Koshy Achen. He simply could not walk.

A member of the Church had dropped Roy at his residence. The condition of the house was appalling. The house stands on a two cent’s property with life interest of his mother who had earlier worked for Karali Nursery School. Roy, his wife, their daughter and his mother reside there. The house has a small open verandha or portico, one room and a kitchen. A kutcha toilet is located outside the building. There is no bathroom. They bathe in the open near a well in the adjacent property. The property belongs to Roy’s married sister who is employed abroad. When he was queried as to what they would do if his sister alienated the property that would prohibit them from using the well Roy was very positive. He said they would find some other way to carry on with their lives.

The house is in need of demolition. It has to be rebuilt with basic amenities. It is sad that an employee of the Church that provides assistance over a broad spectrum of the needy resides in such grueling and appalling conditions.

Roy’s wife is a diabetic. She had discontinued her education when she had failed in her twelfth standard or plus two examination. The child is smart. Roy educates her in the local Seventh day Adventists school. According to him he is no position to send her to a good school.

Christian fellowship includes visiting the needy. It is not certain if anyone from the Church had ever visited Roy’s place. If a few have done it, it is well and good. If not, it is high time the Church evolves a policy whereby a visit to the residences of the employees of the Church by the officials or representatives of the Church at least once a year is made mandatory. 

What Roy Daniel needs:-

1.       The expenses – medical – has to be taken care of by the Church. The accident occurred while on duty.

2.       The education of the girl child has to be taken care of.

3.       Roy’s wife – a smart young woman – has to be encouraged to develop her skills to find employment.

4.       The house has to be rebuilt.

Striving for financial and emotional inclusion that accomplishes upliftment of the downtrodden is the mission of the Church. Jesus Christ had come into the world to show the way. It is for the Church to follow in His footsteps.

Roy’s resolve to pay last respect to Koshy Achen has brought his plight to the members of the Church. 

Late Rev.Dr.K.K.Koshy lives on  with missionary zeal.