Page 39 - Banking Finance April 2016

COVER STORY

GUARDING
BANK'S ASSETS
AGAINST
THREAT OF
NPAS

N o surprise that everyone of us , as individuals, Situation is not different when it comes to the assets of
struggle hard to protect our hard earned financial institutions. Here struggle starts with mobilizing
assets, like house property, land, gold funds. After mobilizing funds, it cannot be kept idle.
ornaments, vehicles, bank deposits, household These funds are to be utilised in creating such assets which
appliances so on and so forth. That struggle starts right are not only safe, but also yield enough returns to take
from mobilizing funds (of course hard earned savings is a care of the depositors' interest and overheads. Of late,
part) to acquire these assets, purchase decisions, best the topic of creating quality assets and maintaining them
selection among the alternatives, utility value and yield, has become a matter of concern to every Banker, whether
life of the assets , comfort and conveniences, etc. in Public Sector or Private Sector.

Any loss in these assets be it in the form of damage, theft, Current Situation:
decline in value will cause irreparable loss, both financially
and psychologically, which, sometimes, cannot be Increasing delinquency of assets is having many-faceted
compensated during a life time. impact not only on the performance of the banks, but also
on the economy as a whole. Soundness of the banking
About the author system, inter-alia, depends on the soundness of its assets.
The NPAs of the public sector banks put together has
L. S. Sheshachala Hegde crossed Rs.3,50,000 crores as on September 2015.

B.Com, LLB, CAIIB Besides, special heavy restructuring of the corporate
Chief Manager (Faculty) accounts undertaken by the Banks before withdrawal of
Union Bank of India forbearance on such restructuring from 1st April 2015, is
Staff College, Bengaluru adding to the woes of Banks as these accounts may slip to

BANKING FINANCE | APRIL | 2016 | 39