According to Rajnish Kumar, MD & CEO of State Bank of India, the Centre, banks and the judiciary too played a role in India’s piled up non-performing assets (NPA).
“I would say everybody is responsible, be it the bankers, be it the industry or borrowers, be it the government, and without inviting contempt of the court, even the judiciary has played a role in this situation,”Addressing a banking conference in Mumbai, Rajnish Kumar said.
According to him NPAs for public sector banks were higher due to government-sponsored schemes and targeted lending.
He said the relationship between bankers and the industry was built on trust. “In several cases there has been a serious breach of that trust, maybe the verification process was missing.”
Delayed response by bankers was also a factor in aggravated NPAs, he said.
“Consortium banking increases risk, due to delayed decision. One way is to limit size of consortium and not have too many banks. Second, the consortium should be comprised of like-minded banks with the same risk appetite,”