The Indian banking system is beleaguered with non-performing assets (NPAs). According to the Reserve Bank of India’s Financial Stability Report of December 2017, the NPAs currently stand at 10.2 per cent of all assets, while stressed assets, which are believed to be NPAs in effect, stand at 12.8 per cent. At the quarter ending December 2017, the bad loans were reported to be around Rupees 8,40,958 crores. But with the Reserve Bank of India (RBI) announcing a complete overhaul of the stressed assets resolution with a strict 180-day deadline, analysts are expecting a spike in the reported NPA levels for some of the large borrowers.
The bulk of India’s soured loans are owed to state-run Banks that dominate the banking system. Criminal investigations into some defaults, in which former bank bosses have been arrested, have made today’s managers fearful that bad lending decisions might come back to haunt them.
Government has recently announced PSBs reforms agenda for responsive and responsible banking, which encapsulates a synergistic approach for ensuring prudential and clean lending, better customer service, enhanced credit availability, focus on micro, small and medium enterprises and better governance.
RBI has eased its NPA recognition criterion for banks for some of their exposure to MSMEs and removed the cap on loans to the sector that can be classified as priority sector loans. However, most Bank Mangers are adopting ” safety-first approach” and are reluctant to lend. Instead, most Banks prefer to park their excess deposits safely with the RBI. This has adversely affected the flow of credit to the industry and more particularly to small and medium enterprises which account for about 15% of the total banking sector borrowings.
In Goa, where the Credit Deposit ratio is historically very low, this ” safety-first approach” will further worsen the situation for many of the Goan MSMEs which are emerging out of the adverse impact of the mining ban. Instead of just mopping deposits, the banks in Goa should take a more proactive approach towards lending in Goa.
At the recently held meeting of the Goa IDC Board, an attempt was made to rationalize the rates for charging annual lease rent – currently annual lease rentals are being charged at rates ranging from Rs. 1 per sq mtr ( in cases of plots allotted from 1967 to 1983) to 1 % of the premium paid to 2% of the premium paid etc. This was resulting in a lot of confusion and errors in calculation of the lease rentals. Further, it was pointed out by the GIDC Managing Director that the amount collected from the lease rentals at the current rate amounted to about Rs. 10.74 crores which was far too inadequate to meet the amount of Rs. 18 crores being spent on repairs and maintenance of infrastructure in the industrial estates. It was proposed that the rate of lease rentals be rationalized to 1.5%.
However, both myself as well as Mr. Rajkumar Kamat, President of GSIA expressed our serious concerns about the increase and its possible adverse impact on the viability of the Industry. We appreciated the IDC’s need for raising additional funds to meet the ever increasing cost of maintenance of infrastructure like roads, water pipelines, street lights etc but it would have to look at other options like getting the road and water pipelines work done through PWD and the streetlight maintenance through the electricity department. While industry may be amenable to some increase, the IDC will also have to take steps to rationalize various expenditures incurred by it and bring in more efficiency and transparency in its working. It was also decided to discuss the issue with our members before a final decision in the matter is taken.
I am very happy that our CM Mr Manohar Parrikar has set May 30 as the deadline for imposing of plastic ban in Goa. Use of PVC based plastic will be banned from 30 May and no plastic packaging will be allowed in the State from December. He has also said that littering would be made a strict offence in Goa. It’s more than high time, we as citizens of Goa and of the world recognized the harm that is caused because of plastic. Research all over the world has identified several areas of plastic debris floating in the ocean. One of these areas called ‘The Great Pacific garbage patch’ central North Pacifuic Ocean has exceptionally high pelagic concentration of plastic and chemical sludge. Most debris consists of small plastic particles suspended just below the surface of water. A 2017 study conducted by scientists from the University of California concluded that of the 9.1 billion tons of plastic produced since 1950, close to 7 billion tons is no longer in use. Toxin-containing plastic pieces are consumed by fish which are then consumed by us resulting in ingestion of toxic chemicals.
Government recognizes the seriousness of this issue but more efforts have to be made to sensitise the panchayats, the villagers and other stakeholders about the need to deal properly with all waste matter and not just plastic. We already have the Goa Waste Management Corporation. But people’s cooperation is also very important. Instead of leaving it to the government agencies , individuals should also make the effort of segregating the garbage at source.
We hope that the smart city initiative will take care of most of these issues in Panaji and that this model will be replicated all over Goa.
As citizens of this wonderful state, we need to be vigilant and we should be prepared to participate in its developmental process. The Chamber will surely play its role in this respect.Download GCCI Bulletin March 2018