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China invests in India WTO Meet: resolved to meet again TIAM turns a full cycle Gas is the way forward Robber barons everywhere The ‘Ayyo-yes’ is no more Infrastructure funding – lessons learnt Limit foreign borrowings to hi-tech, export potential projects... Tribute – Manikam Ramaswami A professional at the helm of IRDA... Towards speedy justice No mega rail project for Tamil Nadu SoA @ 80 Godspeed, Chief Minister JJ Delhi Chalo... A C Muthiah – his munificent bequeaths to science Music happens Things happen by accident and not by design... How Air-India loses customs... Welcome changes that testify to Jayalalithaa’s return to health Noble nonagenarians... Why land prices zoom in TN? Valli, they are more marginalised Parliament in paralysis... Editor's Notes For whom the bell tolls? Eternal support for capitalisation of PS banks Russi Mody – a tribute The rise and rise of KCP Land reclamation from sea appears cheaper! Demise of a media baron... CSR and CMI: promise of another Srinivasan Ramanujan... Building loyalty through the stomach Small units prefers to remain small... Remembering Indira Sivasailam... Delhi is distant… Sri Lanka votes for change to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Poor quality of university VCs When Ratan Tata visited SRM Fuel for thought Auto components surge… Medical costs hit the roof... Modi storms Silicon Valley Air Asia India will set new benchmarks for budget travel There was flood of milk. Reason: no milk commissioner! Another Indian music maestro at the UN A rich pool of talent not utilised…. Online not in line with brick and mortar businesses... When online building permits work…. 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A more liberated TN… Airlines in India: cost and space A friendly business group IPL - no surprise this scam Nuclear power at the nucleus The why of tax incentives The ‘Jayanthi Tax.’ TN-leverage strength of BHEL, NLC... Preserving for the future Shaming of Tamils by Tamil farmers at Delhi The Ports’ Pasha expands into Tamil Nadu Don’t seem to feel the pulse… TN – agglomerate land holdings without alienating ownership Cement prices continue to rise… Naidu’s return augurs well for Seemandhra Whistle-Stop Tour of Raghuram Rajan When the President was rendered homeless… Computation of GDP – conundrums continue Shanti and Sadhana through Music Scientists urged to take up farmer-oriented research Reliance’s TV – 18 ready to launch Tamil News Channel Tough task taking states together Put expensive assets created to use... Of course, Gujarat is vibrant Colour-Chem’s colourful KRVS When small is no larger beautiful.. Tribute – UCAL Selvan… An inexplicable neglect Fall in crude prices help in oil sector reform EVM is tamper-proof Alexa – Talking Wikipedia Boy, can you beat these? He saved millions from starvation... GNS - 100: our first subscriber A Grand Finale for SN’s MS centenary at the US… Discoms deserve better… New IT products of Ramco in the pipeline… Tatas moving out of urea production... Welcome thrust on trade in Modi’s foreign visits... The sea- saw battle continues... A yen for wastage… Multi-faceted Venkat PC’s preference for professionals Editor's Says Convulsions in The Hindu The few handicaps... Tribute – M V Murugappan This scant respect for Law Pharma – overdose of copying A welcome initiative by the judiciary He continues the focus on social amelioration Delhi returns to BJP Return to king coal for urea... Inflation: are we emulating Argentina and Brazil? Measuring roof tops in terms of KW/MW Adharma of opposition politics Quality education through the PPP mode More tributes to GR Excel Generators provide the vital back-up Readers' Mail Making ‘my Amaravati’... Paytm karo... Muffled voices for merit… The star of Spencers is no more When nations steal growth from one another… Build close rapport with business leaders Should we change the official year? Welcome focus on core competence IAS invades NDDB... Contrarian cousins Naidu will soon build a new Hyderabad Adapt Vajpayee dinner diplomacy B H Kothari - a tribute Welcome GST Diamond jubilee of Egmore Samskrt School For whom the MIDS bell tolls? Telangana in top gear… CII projects higher growth… The brown list of Venkitaramanan IPL type auction for VCs? Recognition to role of NBFCs.... MHC should not return to its old indisciplined ways The power-full Hindujas Five star activism stalls development activity Modi and the lady No Maha Koottani in TN... ONGC at KG Basin Kudos to NDTV... Tatas moving out of urea production... Which side are you, Montek? Mersal magnified An enemy’s enemy is a friend London, London Narayan Delhi is distant S V Raju – a ‘good’ true liberal A glass full of corruption Why this malaise in medical education? GM Technology at last! Vibrant Gujarat Focus on quality of power - its only around 170-180V More Shakti to resource mobilisation... West Bengal: mindless malignancy Gay abandon in pricing Wise Presidents Solar thermal shines… Not just in-laws (and outlaws); they’ve renowned academics at the helm! Rs.1600 crore paper board plant of TNPL Where is Rajaji? Haul over the coal Road development slows down F C Kohli - his concerns all embracing Lesson from Chandrababu Naidu TGS- The king storyteller The Jan Dhan bonanza Kinetic Karnataka Quality silica from Neyveli Marketing expert Balagopal is no more The nuclear option Increasing non co-operation of state leaders A Grand Finale for SN’s MS centenary at the US…
 
Eternal support for capitalisation of PS banks

The NDA II government has initiated action against eight chairmen and managing directors of public sector banks finding serious irregularities associated with them. These relate to several questionable actions like spike in NPAs' bad recoveries...

IE has been pointing to the deficiencies in the system of thrusting CMDs and EDs on banks on industry- wide seniority. In such a system one noticed an ED of a bank posted as the CMD of another over

limited tenures of a maximum of five years or retirement earlier on superannuation. IE has pointed to unsavoury practices by the experience of Indian Overseas Bank. This bank had for years the CEO thrown up from the ranks accumulating the work culture of the bank as also its clientele. Those brought from outside took time to find the roots. Ambitious bankers like M Narendra used the position on self-promotion. These included carrying the favour of the Union Finance Minister, the Minister of State for Finance, and the deputy governor Reserve Bank. The bank even celebrated its founder’s day in the capital. New publications on the history of the bank were produced. Like M Gopalakrishnan of Indian Bank earlier, credit was dispensed liberally. It should not, therefore, be surprising that the bank leads in the matter of NPAs. The second quarter results show a staggering 29 per cent increase.

There are reasons to suspect lapses just due to suspicious deals too. A chartered accountant specialising in banking deals narrated this incident:  sick company with huge bank debt sought the assistance of this chartered accountant. There was accumulated debt of around Rs 10 crore. The CA established contact through some intermediaries with a high profile politician having close links with the North Block. A deal was struck, whereby a settlement was made for less than half the amount due. A hefty fee was paid in cash through carefully delineated channel to this high profile politician. The CA said that such settlements were legion. The powerful Congress politician had huge incomes on such settlements, impoverishing the banks.

Bank chairmen adapted the noblesse oblige policy and expected due favours from the boss at the North Block. The appointments of chairmen of banks were done on an arbitrary manner through an opaque process as happens in appointments of vice chancellors of state  - run universities in Tamil Nadu.

The NDA government has announced a transparent system in the selection and appointment of chairman and executive directors of public sector banks. This needs to be commended.

Yet another welcome step by the Modi government is the plan to offload shares in excess of 51 per cent. In the present boom in the stock market, such a measure can help banks raise the needed resources for increasing the capital in accordance with the Basel norms. It is unacceptable for public sector banks to look for the government to capitalise them eternally.  Large private banks like HDFC and ICICI raise the needed capital on their own. Modi would do well to proceed with the plan to reduce state ownership to 51 per cent, to start with and progress to 26 per cent in due course. In this process he should ensure that such large institutions would stand on their own.

 

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