THIS IS WHAT I HAD WRITTEN TO BUSINESS TODAY

THIS IS WHAT I HAD WRITTEN TO BUSINESS TODAY

Dear Sir,

This refers to your “revealing” and “eye-opening” cover story: ” Money From Junk” (BT, August 2,2015).

As rightly observed in your Editorial, globally many “bargain hunters” have made fortunes by buying distressed assets for peanuts and selling them later at phenomenal rates. With the increasing tribe of ARCs (nearly 15 names listed on page 59) in India now, the future of such companies looks bright.

However, I feel the term “junk” used in the story, seems to be a misnomer. Plants, buildings, machinery, stocks and other assets often do have what is termed as “balance future life” and if sincere efforts are made for recovery, revival etc, I feel they can be put to good use for quite a few years, until they can be “milked” profitably.

The term “Vulture Funds”, seems to be an apt description akin to the behavior of vultures which openly feed on corpses of animals and human beings left to die. In fact, vultures are like scavengers which help get environment / economy get rid of rotten, fishy, smelly stuff.

Bankers on one hand are partly to be blamed for creating huge mass of NPAs by giving up recovery, rehabilitation, revival efforts which are difficult and time consuming compared to the ease of lending to meet new advances targets. In spite of umpteen tools like Credit Monitoring, Supervision, Health Classification, Compromises, OTS routes, CDR Mechanism, Suit-Filing, SARFAESI ACT 2002, DRTs and BIFR Cells, the net result  has so far resulted in only ballooning of  distressed assets and the monster of NPA has not been reigned in, as desired. It is high time a high powered committee of RBI, Bankers, Industry Experts etc is formed without any further delay to overhaul the system, formulate stringent policy guidelines, replace old laws with new ones in tune with the needs of the times and ensure a healthy banking system- the back-bone and nerve-centre of the Indian economy or else, be ready to face consequences like the recent Greek tragedy in near future!!

I enclose a few photographs on Vulture Funds which you may use as you deem fit to highlight the issue in case you publish this letter of mine. A picture is worth a thousand words, it is said!

J S Broca, New Delhi, 23^rd JULY 2015

THIS IS WHAT HAS BEEN PUBLISHED IN THE LATEST ISSUE OF BT DATED AUG 19^TH 2015 WITH COVER STORY ON INDIAN CEOs BEING OVERPAID:

A Bright Future Beckons ARCs

This refers to your cover story on asset reconstruction companies or ARCs (Money from Junk, August 2). Globally, many “bargain hunters” have made fortunes by buying distressed assets for peanuts and selling them later at phenomenal rates. With the growing tribe of ARCs in India, the future of such companies looks bright. However, I feel the term “junk” used in the story seems to be a misnomer. Plants, buildings, machinery, stocks and other assets often have what is termed as a “balance future life” and, if sincere efforts are made for recovery, I feel they can be put to good use for quite a few years until they can be “milked” profitably. Bankers are partly to be blamed for creating a huge mass of NPAs by giving up recovery, rehabilitation and revival efforts which are difficult and time-consuming, compared to the ease of lending to meet new advances targets. It is high time a high powered committee of the RBI, bankers, and industry experts is formed to overhaul the system, formulate stringent policy guidelines, and ensure a healthy banking system or else be ready to face the consequences like the recent Greek tragedy in the near future.

J.S. Broca, New Delhi