Showing posts with label Governance. Show all posts
Showing posts with label Governance. Show all posts

Friday, February 23, 2018

10-Point Agenda for Rebuilding Trust in Banking - PNB Fraud


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Bad banking has now become major concern of the body democratic. PNB fraud of Rs.11300cr proved a saga of utter disregard to responsible banking. Ethics took hard beating and governance in utter disarray in the backdrop of unlearnt lessons of the similar past offences both within the bank and outside. It takes years to build reputation but only a few minutes to destroy.

Wednesday, December 27, 2017

Can Cooperative banks be better alternatives?

Cooperative Banking – Hopes on the rise

Banking environment in India structurally has become more dispersed than before with the Small Finance Banks, Payment Banks, Postal Bank emerging on the scene. Mergers and amalgamations in the private and public sector banks and ever increasing NPAs in the commercial banks are threatening the stability of the system. Seemingly strong macro-economic fundamentals notwithstanding, disruptive technologies are also adding fuel to fire. FRDI Bill poses a threat to the security of depositors and leaders’ promises cannot be insurance to what the bill itself holds for the banking clientele. Senior citizens, differently abled citizens, women and several customers of small means feel distanced from the services they were expecting at the hands of the banks.

Saturday, July 29, 2017

'For Whom the Bell Tolls?' Bank Mergers

Consolidation, Convergence and Competition of Banks in India

Cooperative Banking suffering weak governance, poor legal framework, dual regulation, and excessive politicisation is in search of sustainable solutions and the consolidation move in the three states rightly highlighted by Bloomberg in its article a few days ago is perhaps the right move. Following the recommendations of Vyas Committee (2005) NABARD amalgamated the 196 RRBs established under the Multi-Agency approach to rural lending in the country during a fifteen year period till 1990 into 64 by 2013. This amalgamation has only partial success as the RRBs are still distant from the objectives of their creation in 1975.
1991-2001 saw bank disintermediation in the wake of financial liberalisation, prudential norms and profitability focus. Directed credit program was blamed for the rising NPAs till then. I recall Dr.Y.V.Reddy mentioning in his latest book ‘Advice and Dissent’: “the seeds for bad times are always sown in good times.” 2003 was the year of ‘crazy credit’ that took the route of CDRs in 2010 and 2011. This grew into a immature NPA adult and aged along to reach the unsustainable level of around Rs.8trillion. Courtesy this situation, lazy banking had set in.

Saturday, June 25, 2016

Are we on the right track in tackling NPAs?

Are we on the right track for NPA resolution?
B. Yerram Raju*
In the last few years, barring the 2008 Recession and its global impact, no subject other than NPAs of the Indian Banks has occupied so much print space and media attention.

If good number of banks in the public sector has faltered in loan origination succumbing to external pressures, some others have failed to supervise their loan portfolio. But their contribution to NPA portfolio may not be more than 25 percent. NPAs that turn as bad loans are the real culprits. Only 20 percent of the total quantum of loans at the doorsteps of legal system could be resolved to the satisfaction of the banks, notwithstanding the projected empowerment of banks through the SARFAESI Act. The real reason is, therefore, beyond banks – the law and justice.

Sunday, April 12, 2015

Mudra Bank for the poor - Confusions Galore

http://www.moneylife.in/article/mudra-bank-confusions-galore/41221/62915.html

Will MUDRA Bank put its stamp on the Indian Financial System as the institution to resolve the Financial Inclusion dilemmas in the rural areas?

Piper calls the tunes. Inauguration of Micro Units Development and Refinance Agency (MUDRA) Bank by the Prime Minister before he left for Canada, Germany and France on a nine-day tour is being seen as a landmark akin to ‘Garibi Hatau’ and IRDP of the forgotten decades. People say that name has a lot to do with institutions. The name and style of MUDRA has built into it an agency and a bank. It has in it, development and refinance as functions.

Saturday, January 10, 2015

New Year Bites 2015

For the New Year:



Year 2014 can be termed as year in waiting. People waited with bated breath for the policy paralysis to end and for the economy to start growing to its potential. Post elections, the wait did not however end. There have been announcements more than achievements and promises more than performance. 2015 would therefore be a demanding year for the rulers.

The crude shocks elsewhere brought some cheer to India in containing its current account deficit and inflation that touched unsustaining levels in March 2014. Stock markets reacted favourably with the indices taking the highest ever jump of 6000 since the last General Elections. They shocked the investors with a peak in the crash on the 7th January 2015 led by yet another decline in global oil prices and other commodity prices.

Tuesday, December 30, 2014

Banking on cooperatives is better business

Cooperatives are wealth creators:
The need for cooperatives in wealth creation arises mainly due to the reason that a cooperative can create more value or surplus than the individual can. Conceptually, if a cooperative is well run, it will bring more benefits to its members. The organization and management of a cooperative enterprise, however, is complex. It is more complex in the case of rural cooperative credit structure as (1) this structure is part of the overall financial structure and has a contributory responsibility to the financial stability (2) it has to abide by the regulatory policy and procedures and (3) its capital structure demands continuing infusion of capital under Basel III.

Thursday, May 22, 2014

The Winner and the Vanquished

The Winner and the Vanquished

Decidedly the World’s greatest democracy has just finished its biggest General Elections – the fifteenth in a row. It attracted lot of attention of the western media – the Economist, the Financial Times, The Guardian, The New York Times just to name a few. Money, liquor and raining promises like never before greeted the electorate. It was however the last NDA alliance – the TDP-BJP combine with an emotional entrant into the political confabulations that has been greeted with enthusiasm from some and contempt by several. Narendra Modi the first ever PM designate to bow to the Parliament stairs before his entry, demonstrated cultural excellence unparalleled setting the tone for virtuous move forward.

Wednesday, September 4, 2013

Reforms Needed Most in Education Sector


Reforms to Governance in Education Imminent

Prime Minister Stephen Harper of Canada apologized to his Parliament for coming late by fifteen minutes and the reason adduced by him was that he had to drop his child in a government school on an intense rainy day with traffic snarls coming in the way in Ontario. President Obama’s daughter and his private secretary’s son study in the same school and sit side by side. There is no discrimination among the children of different classes of people in these parts of the world.
In India, we had an education system where the primary schools in villages and towns and high schools were all in the fold of government or Panchayat or Zilla Parishad (the old name District Boards)- the local bodies. But during the last three decades, private schools have come up at their places of choice, many a time with the munificence of the local politicians. The fees for admission in the name of quality started touching the roof and took the shape of donations. This has spread to the higher and technical education as well.

Public Schools, with the support of government came up. Most public servants and politicians started taking pride in putting their wards in such public schools using their influence. In several public schools it is not uncommon to find somebody from the education department in their Boards. The spouses of some of the civil servants get plum teacher posts in such schools. On the other hand, if these politicians and civil servants had sent their children to the government schools, they would have certainly ensured that enough budget releases for the improvement of infrastructure in schools. The uncared for attitude of bureaucrats and politicians is solely responsible for the dilapidated primary and high school buildings owned by the government and the related infrastructure.

Teachers of appropriate qualifications and interest became a rarity due to poor pay scales initially in this sector compared to the other sectors notwithstanding the primacy of this sector.  By the time the scales started improving, the quality of teachers and teaching deteriorated beyond repair. Qualification took precedence over quality and interest in profession. Dedicated teachers despite annual awards for best teachers announced by the Government have become a rare breed. Respect for teachers started declining with a few incidents of teachers beating up children, committing atrocities on the girls etc have been repeatedly surfacing and such incidents were unheard of in the past.

Teachers in the past, say up to 1960s at all levels viewed their profession as sacred and never participated in strikes and dharnas. They attached high values to their profession and concentrated on imparting noble values to the students. The tragedy in those days was that some of them suffered in penury until some of their students came to their rescue. Now, when the sailing is good, values have vanished. In fact, it should go to the credit of late Shri P. V. Narasimha Rao, when he was Minster of Human Resources, he introduced Navodaya Schools with good intentions, largely based on our traditional Gurukul. But his experiment was allowed to suffer at the hands of politicians and bureaucrats and the reforms, so called, concentrated on school drop-out reduction, that has become a number game, mid-day meal programme to ‘incentivise’ the poor to reach only the ill-equipped government schools – and the incentive ended up in badly cooked and badly delivered food resulting in a few kids sacrificing at the altar of mischief of the cooking ‘teachers’. 

Still, there is scope for resurrection. First, recognise this problem: find solution where the problem lies. Second, allocate liberal budgets for immediate improvement to the government school infrastructure. If the Government is prepared to be  transparent, there is enough interest in NRIs to adopt some schools for certain components in the infrastructure provided it is willing to create a learning environment; cancel registration of all schools that do not have play grounds and libraries;  change the curriculum in the primary and secondary schools to include games, library reading, project work and internship from ninth class for taking up social service and award marks for such assignments as part of the grades and more importantly, have some illustrious leaders autobiographies of freedom fighters like Madan Mohan Malaviya, Lok Manya Balagangadhara Tilak, Netaji Subhas Chandra Bose, Mahatma Gandhi, Ambedkar,  Lal Bahadur Shastri to site a few. Include a few chapters from the Glimpses of World History of Pandit Nehru in every standard from the 8th onwards. Teachings of Swami Vivekananda, Ramakrishna Paramahamsa, Poems from Gitanjali of Rabindranath Tagore, should be part of cultural readings for all children right up to the College level. In each of the regional languages there is great wealth and morals that should essentially be part of learning from the childhood. The current day child has the sharpness and speed like none before. They are unfortunately being turned into scoring machines and this is happening sadly only in India.

Where is the need for transferring teachers? What is needed is proper assessment and involvement of parents in achieving the desired levels of excellence. Responsible teaching, responsive administration and unburdening the child of cart load of books but enabling him with knowledge load, flexible timings, audit and accountability, are the need of the hour. Competitively the young nation is losing its verve.   If we make available education free for all girl children up to XII standard there need be no specific reservations. The entire society would look up and grow culturally.

I visited the education system in Canada and was amazed to find that education up to secondary school higher grade is free. Children get report cards on their performance monthly and the report card contains details about how they fared in curriculum, character, punctuality, reading habits, project work (every student from the 4th standard has to do project work in different fields), arts and crafts, games and sports, dance, drama etc., and where the student needs to improve and how they have come to such assessment. They are counseled right from the 8th standard onwards as to how to help the parents at home, the suffering in the communities, how important it is to provide charity in one’s own affordable range etc. They are taught skills in cooking, carpentry, metal works as part of their project work and this is part of the curriculum. From the 10th standard, they can enrol for internship to take up any voluntary service.  The elementary schools provide admission to the children of households in the distance of 5km. For a cluster of 3-5 elementary schools there is one middle school. No child can be denied admission without valid reason. There are no admission costs for any permanent citizen. School buses would be available at concessionary fares for children staying beyond 1k.m in elementary schools and for middle school children to those staying beyond 2.7km from the school. Once in a week, a mid-day pizza or burger is provided on nominal payment. All the schools have play grounds, gym and library.

In each school a break of 45 minutes is provided at 11.30a.m (the school starts at 9a.m) for children to play as they wish in the playground. The school closes at 2.30-3.30p.m. The schools work for five days in a week. Once in a year the middle school children are taken on excursion after obtaining parent’s written consent. All children have free health check-up and insurance. Why will not children develop in such environment? When do we in India get this happy environment for education of our children?

Governance of higher and technical education is a different ball game and needs different treatment.