Call
it a double whammy for public sector banks. Housing loan frauds have crossed
the 100-mark in just three months this year. To top it, the amount under
write-off (including compromise) for all categories of loans has increased
alarmingly.
The
Government tabled two sets of data in the Lok Sabha on Friday indicating that
banks need to pull up their socks to improve their working. There is
apprehension that non-performing assets (NPAs) may increase when banks start
announcing their financial results for 2011-12.
In
a written answer on home loans, the Minister of State for Finance, Mr Namo
Narain Meena, said the Reserve Bank of India had no specific information about
home loan scams at any public sector bank. To curb incidents of frauds, the RBI
had advised banks to introduce a system of concurrent audit, he said.
The
Central Bank had also asked banks to review the working of internal inspection
and audit machinery by the audit committee of the Board of Directors. Banks
were also advised to constitute a special committee of the board exclusively to
monitor frauds of Rs 1 crore and above.
However,
a senior bank official said that lack of facility of online inspection of
property documents besides other issues help fraudsters. Another senior bank
official did not rule out connivance of bank staff and builders.
HEAVY WRITE-OFF
A
set of data shows write-offs (including compromise) up from nearly Rs 7,000
crore (March 2009) to over Rs 17,000 crore at the end of March 2011. Banks
resort to write-offs only after exhausting all other possible avenues for
recovery or when the asset coverage is not enough, Mr Meena said.
According
to RBI guidelines, banks should either make full provision or write off such advances
and claim tax benefits.
While
bankers claim that extra caution in due diligence is taken in all kind of
loans, things become difficult when there is too much political pressure to
write off or compromise.
+1.jpg)
0 comments
Post a Comment