This has reference to the news on the arrest of former SBI Chairman Pradip Chaudhari in connection with a loan scam. Many prominent bankers have criticised the move saying it was hasty and a proper criminal justice system should be put in place to protect bona fide action of bankers.

No banker should be penalised if lending decisions are taken in the normal course since business risks are part of the lending process.

As per a report shared by the government in Parliament, since 2015, 38 wilful defaulters have fled India during the last five years which include Vijay Mallya, Nirav Modi and Mehul Choksi.

Certainly all these instances could not be construed as ‘deserving cases’ for lending, and hence cannot be treated as bona fide decisions which call for action against the top echelon of bankers.Banks should realise that when there is a crunch, the capital which government infuses is taxpayers’ money.

This calls for utmost care on the part of banks when it comes to deployment of funds for the purpose of lending.

Chennai

This refers to ‘RBI panel favours sale of stressed assets by lenders at early stage’ (November 3). Sale of financial assets to ARCs/banks/NBFCs/FIs is considered when realisation of security is difficult and time consuming, no compromise offer is perceived in the near term, high administrative, legal, security and opportunity costs associated with continuing the financial assets, no acceptable resolution option in sight, etc.

Lenders are assigning…

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