tag:blogger.com,1999:blog-33693245.post3342382663875268943..comments2024-03-04T23:40:58.133+05:30Comments on The Big Picture: Gyan SangamThe Big Picturehttp://www.blogger.com/profile/06018983225756352176noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-33693245.post-18771253278313563062015-01-10T12:21:37.864+05:302015-01-10T12:21:37.864+05:30uureg consortium financing like chandramouliji. i ...uureg consortium financing like chandramouliji. i am also reminded of my student yrs of mastr in indl eco and then mba in begjnnig of eighties when i made studies on turnaround strategies of sick industries as well as banks. now i find a new definition of risk from current banking qeverywhere but more so in india. actually my being involved in dev bankg fr agrl dev and rural poor kept me away frm big ticket lending scene and also forced me to again go into academic area to find solution for increasig access. now that pm has through his jan dhan and aadhar impetus has achieved the access issue, now i tried to understand the now fashionable term risk of bankers. if i am permitted to say so. the risk could be eSily be defined frm comparing the consorium finacing being done by indian banks 30-40 years back and now. and the major factor is the presence or absence of sufficient collateral taken from the unit already sick, weak or potentially sick . i might not be saying anything new but i am sure both of u might appreciate still could help little somewhere to the policy maker who r rightfully taking vudance frm u. sirs i feel this is not a financial or accounting problem and that is why it ihas been eluding solution but a development problem which is multidisciplinary in nature. regardsAnonymoushttps://www.blogger.com/profile/14517629296172978029noreply@blogger.comtag:blogger.com,1999:blog-33693245.post-41355833885836119102015-01-08T15:44:31.121+05:302015-01-08T15:44:31.121+05:30Dear Professor,
In the 80s when I was doing my CA ...Dear Professor,<br />In the 80s when I was doing my CA all huge loans were financed by a consortium only. I do not know how this concept changed. Your group's suggestion is a welcome one to spread the risk esp. in infrastructure funding to mitigate the present troubles.<br />Chandramouli.chandramoulinoreply@blogger.comtag:blogger.com,1999:blog-33693245.post-67720379926987674522015-01-08T15:09:24.071+05:302015-01-08T15:09:24.071+05:30Thanks Shishir and Chandramouli. I am not sure I a...Thanks Shishir and Chandramouli. I am not sure I am at liberty to share the recommendations of our group. In any case, only select recommendations of all six working groups were presented to the PM. <br /><br />Let me just mention one proposal we made, return to consortium financing for loans above a certain threshold, say, Rs 500 crore. It's well known that had lenders had a consolidated view of borrowings of infrastructure companies, they would not be in so much trouble today.<br /><br />As for fixing management and governance, the problem has entirely been one of lack of political will. <br /><br />TTRT T Ram Mohanhttps://www.blogger.com/profile/06925858642839337950noreply@blogger.comtag:blogger.com,1999:blog-33693245.post-40680763871366748182015-01-07T14:35:54.577+05:302015-01-07T14:35:54.577+05:30Dear Professor,
1. “Gyan Sangam” – I initially tho...Dear Professor,<br />1. “Gyan Sangam” – I initially thought it was something to do with spiritualism or something like “Gita Gyan Yagna”.<br />2. You have not specified what were your group’s recommendations on “Risk Profiling & Recovery”. Hence, we are unable to say anything on your belief that if they get implemented that would make a sea change to risk management in PSBs.<br />3. There is a social angle to funding and this can only be expected from PSBs and not from PvSBs. The Govt has to retain the “Public Sector Character” of PSBs and that is what has been reiterated by FMand PM.<br />4. The gap in performance between PSBs and PvSBs is bound to exist due to the social angle.<br />5. To fix management and governance has been discussed at length in numerous seminars and gatherings in the past and the same has once again been discussed at Sangam. One has to really understand why this has not fructified into any concrete actions and results? Is the problem that we are discussing at various forums itself is defective incapable of being resolved in view of our existing systems?<br />6. Succession planning from within will work only if there is a apt recruitment and training mechanism in place within the organization. Performance evaluation and accountability is missing of top PSB officials and hence there is an absence of commitment.<br />7. CMD post can certainly be split into C and MD. The functions of both offices are different and clearly defined in the statutes. I do not envisage any back-seat driving by Chairman and that task is normally done by the Govt. itself.<br />8. I agree with you that Bank Investment Company for all PSBs would be the ultimate nightmare. But here the idea was to raise funds for capitalization of banks and not otherwise.<br />9. If there is a social angle autonomy of PSBs cannot be achieved. We cannot evaluate PSBs from a private sector angle. This have to be viewed practically from the point of view of prevalent system. Any idea to bring out fast reforms will put the existing system into a disarray.<br />Chandramouli<br />chandramoulinoreply@blogger.comtag:blogger.com,1999:blog-33693245.post-85366583941220069032015-01-06T18:24:43.393+05:302015-01-06T18:24:43.393+05:30Comments
“My group dealt with Risk Profiling and R...Comments<br />“My group dealt with Risk Profiling and Recovery. …actions we wanted of bankers and actions we wanted of policy makers. The final recommendations emerged …………Even if a few of our recommendations get implemented, I believe they would make a sea change to risk management in public sector banks. (What were the recommendations? an elaboration might be more useful to reader pl.).<br />“I am awaiting clarity from the government on a couple of issues. First, does the government wish to retain the "public sector character" of banks (that is, a stake of 51 per cent or more) as the FM promised in his budget last year? Two, does the government expect PSBs to perform a social role or is it happy for them to pursue profit? (Answer to First is already given by Prof in second part of his same question, and regarding second there shouldn’t be any doubt about the primacy of social role of PSBs since these were nationalized and expanded and nurtured. The issue is to make these more sustainable while carrying out their primary duties in a professional manner through good governance and management practices (as many of the other variables are external to it). Needless to say, since profit is one of the more acceptable criterion for assessing the efficiency and might show some signs for sustainable operations, the efforts have to be more focused towards changing internal organisational environment which might be easy. Regarding external variables, the creation of an enabling environment is already there as might be seen from the non-interference of the finance ministry in the handling of monetary policy by RBI. Prof has rightly pointed out about that “Leaving aside the details on a host of matters including risk management, the government needs to do two things: fix management and fix governance”.Anonymoushttps://www.blogger.com/profile/16391128174443701396noreply@blogger.com