Sunday, September 3, 2017

Guru Brahma Namonnamah

Remembering my Teachers

Guru Brahma Gururvishnu Gururdevo Maheswarah:

Parents take the throne on the Teachers’ Galaxy. My Pranams.

Indraganti Hanumatsastri, my Telugu Teacher in 8th standard at District Board National High School, Ramachandrapuram, East Godavari District guided me to win a district level debate competition at Rajahmundry in 1952 on the subject – ‘Is Adult Franchise good for India’s Body Politic?’ in Telugu.
S. Radhakrishnan, my English teacher and Head Master at the Board National High School, Bapatla laid firm foundation and he never spared the cane when it came to correcting grammatical errors. He introduced Wren & Martin English Grammar as part of our regular curriculum.

Diwakarla Rama Murthy, brother of Divakarla Venkatavadhani of Osmania University taught us writing poetry in Telugu while at Intermediate in Mrs. A.V.N. College, Visakhapatnam (1957).
Greater fortune blessed me in the higher studies at Sri Venkateswara University College to have been taught during my graduation course by Rayaprolu Subba Rao and Pingali Lakshmikantham; M.V. Rama Sarma, old poetry (Milton’s Paradise Lost); Mrs. Suryakantam (Thomas Hardy’s Return of the Native and Galsworthy’s Strife); Shakespeare’s ‘Macbeth’ and ‘As You Like It’.

Luckier still during my Post Graduation in Economics – Prof E.K. Warrier; Prof. M.S. Prakasa Rao who laid foundation in the  subject by making me read the original authors: Adam Smith’s Wealth of Nations; John Maynard Keynes – General Theory of Employment; Kenneth Boulding – Economic Analysis that earned me distinction in M.A (Economics) in 1962. It was Prof. Prakasa Rao who advised me that if I do not have an idea to contribute on my own, I should not attempt an article. He guided me into publishing my first article on ‘Governance in Cooperatives – A Case Study of Tirupati Town Cooperative Stores’, in the Madras Cooperative Journal in 1962. This foundation saw me as author of hundreds of articles and 15 books in Economics and Management.

Greatest of my youngest teachers is C. Venkata Ratnam who adorned Gitam Institute of Foreign Trade during its formative years and International Management Institute later who guided me for doctoral thesis in 1984. He sent out the Application for admission to Andhra University Ph.D. Course in 1981 when I was Lead Bank Officer of the SBI at Sangareddy. I completed my Ph.D course in commerce and management studies with the subject – Credit Planning in Medak District.

It is my teachers who made me what I am today with positive outlook, unblemished career, humility and happiness in life. All the errors and omissions are truly mine.

On this Teachers’ Day I am greatly beholden to them. I seek their eternal blessings.
“గురువులు, శబ్దబ్రహ్మ
స్వరూప లలితాశ్రయులు,  రసవదిష్టార్థ
స్ఫురదమృతకంఠులు,  కవీ
శ్వరులు, తదుద్బుద్ధ చరణ చరితము నెంతున్‌. మాతృ గీతా; Acharya Rayaprolu Subbarao



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.

Wednesday, July 19, 2017

NPAs of MSEs Need Alert Banking

NPAs of MSEs Need alert Banking


Grouped under unorganized sector, micro, small enterprises (MSEs) are suppliers to the organized medium and large enterprises. With GST they would migrate from unorganized to organized territory ere long.

Many entrepreneurs have been wondering about their future as their working capital cycles shake up. Credit to them has been on the continuous decline from the banks. In spite of GoI guidelines of June 2015 and master directions of the RBI, several deserving non-willful defaulters’ accounts have not been revived/restructured. Zonal Committees for MSME stressed asset resolution continue to make an apology of their presence. The remedy suggested by the RBI in its master directions with SMA(0,1,2) proved worse than the disease going by the analysis presented below based on the data in RBI Bulletin January 2017.