NON-PERFORMANCE
Non-performing loans are known as non-performing assets.The latter in its entirety has become a field of study requiring assetwise specialization to achieve profitability . The Reserve Bank of India , though prescribed THE KYC{KNOW YOUR CUSTOMER} NORMS in general , there is every need for a different set of KYB { KNOW YOUR BORROWER }NORMS.
Warren Buffet says ' You can't have good contracts with bad people'.
" If KYB stands for 'KNOW YOUR BAD PEOPLE' ? " ,
KYC stands for ' KNOW YOUR GOOD PEOPLE'.
An example : One Asst.Gen.Manager of Banking got killed in the process of recovery of a 'BAD LOAN' while on duty in the state of Madhya Pradesh in North India in 2009.
I frame a rather new story to Banking . It is Ban the King . In our good old financial history, the facts run to say that the soldiers of Kings go to usurp on orders the valuables like rice, jewellery , utensils, diamonds, crops, houses etc. of residents in the kingdom to deposit in the King's treasury.The residents thus victimized suffered from hunger and poverty. One day, all the residents had a meeting that they would collectively hide their valuables and savings for a better life from the King and his soldiers , thus banning the King , which is the present day modern BANKING !! THE KING IS BANNED !!! BANKS BORN ! KINGDOMS VANISHED . SOLDIERS NOW CUSTOMERS OF BANKS ! That is so great indeed for all readers of this article instantly.
The American Random House Dictionary interprets "Manage" as "to continue to get along" . When my Professor asked me in my CAIIB -EXAMINATION COACHING class[Mumbai] what is management , I replied 'to get along with' . HIS EXCELLENCY retorted immediately ' How do you get along with bad people ?' For a student like me , it was a tough moment to answer back on bad people . The Dictionary doesn't classify Bad People. I so felt in the Class-room dumbly .
The Public Sector Banks focus on performance . A topper always confronts another either from public or private Sector . It is the game-plan of interests & percentages in the Commercial Banking for savers and borrowers globally. Consolidation of savers and consolidation of borrowers globally means the erstwhile inter-dependance of the two till now . Why not make independence for them to purze economically the roots of bad people [borrowers] from getting more and more institutionalized as contributors to good Economics.
The need of the hour is to redefine Banking bifurcating
ACCEPTANCE DEPOSITS BANKING
and
LENDING BORROWER BANKING ,
being two super-specialities under two different roofs but not side by side under one roof in the name of BANKING .
At last , the layman has already got wild of it that depositors' money is borrowers' money !!
WRITTEN BY : Dr. Rojukurthi Sudhakar Rao.
