The PSBs might have churned out better numbers in the quarter ending June 30, 2018, after higher provisioning for NPAs in the earlier quarters, but what is the cumulative extent of the public money that have disappeared as a result of high NPAs in the earlier quarters that has led to huge amounts being drained off from the PSBs that are a reflection of decrease in the values of the PSBs.
Another point of argument is that being the time when elections are to take place shortly, the government should not be pointing fingers at other parties, principally the Congress as the reason for the NPAs. No matter what the political affiliation, all defaulters should be brought to book and made to repay. The progress on Vijay Mallya, who owes Rs 9,000 crores to various banks should be pursued vigorously as well as that of Nirav Modi and Mehul Choksi, who are known to have borrowed from a consortium of banks thousands of crores of rupees. Ultimately, it is the investing public who is losing the money, which has made the PSBs according to conservative estimates poorer by Rs 18 lakh to Rs 19 lakh crore.
Will all this money be ever recovered? Since the PSBs are in bad shape, merely creating a vacuous euphoria may be defeating the impression that holistic fundamentals count more than mere superficial and illusory disclosures. It is known that the bank depositors especially the fixed deposit holders have turned to investing in mutual funds and not only the bad performance of the mid-caps and the small caps have even led to investors losing money in their mutual fund holdings, but also the government has levied a tax on every dividend paid to investors.
The markets are at an all time-high, with both the Sensex and the Nifty having reached peaks, but still except for the 30-share and 50-share indices respectively having performed, which are basically the best large-caps, most mutual fund investors are incurring significant losses. So what is the financial status of equity-linked investments, they seem that, but for a few blue chips, the broader market is under performing badly. No cause for celebration as, it is believed that banks do not lend big amounts any more.
