Vice President Venkaiah Naidu ask banks for stricter due diligence

NEW DELHI: Vice President Venkaiah Naidu on Friday said that the rising Non Performing Assets (NPAs) in the banking system is a cause for great concern and has certainly affected banks’ capacity to lend.
He called on banks to maintain strict vigilance during pre- and post-sanction procedures of loans and never make compromises in the due diligence processes, the Vice President said lenders must constantly strengthen their internal processes to effectively monitor funds and maintain strict discipline in lending.

Naidu who was speaking at the 125th Foundation Day celebrations of the Punjab National Bank (PNB) said there has to be an effective and efficient system of checks and balances in place so that the loop holes in the system are not taken advantage of.

"We must also take a re-look at the practice of financing big-ticket projects which have long gestation periods and hence face cash flow issues, through deposit-taking commercial banks," he added.

Referring to various populist schemes announced by political parties, he said, so many politicians are taking to populism.

"We have to see that we supplement the infrastructure, we provide opportunities of better market, and we take care of timely, affordable and cheaper credit available to the farmer. These are the long term solutions. Policy makers of the country have to think on these lines," he said.

PNB MD Sunil Mehta said the history of the bank has always been strongly intertwined with the history of modern India.

"Last year was a challenging year for us. Putting the past behind all toiled hard to ensure that the bank returned to profitability in just 9 months," he said adding that PNB has topped the first ever EASE (Enhanced Access and Service Excellence) index this year, he said.