MOC OF 3.56 CRORE AT SBI BRANCH IN MP

As long as the member didn't specifically give out the name of the SBI branch, I don't think he breached the terms of confidentiality with the bank branch. The member concerned clearly feels on top of the world having gotten seemingly good advances of Rs 3.56 crores declared NPAs. I do believe a great deal of pressure must have been brought to bear upon him.

The SBI officials—branch as well as those at the Regional Office--must have pulled out all stops to persuade the auditor to agree to drop the MOC. And with an MOC of that size dangling over the branch manager's head, I do not even rule out monetary inducements having been held out to the CA. Kudos to this member for not succumbing to the temptations and living up to his last name that he shares with that Experimenter of Truth aka Mohan Das Karam Chand.

No matter how advanced and sophisticated the CBS or any other NPA-detection software is, clever branch officials always know how to get around it. The CBS will throw up NPAs only by applying the objective criteria that's been fed into it. Computers can't judge. Being machines, they do not have judgement. A good auditor can smell a rat within moments of going through a borrower's account statement and file. Visiting the unit and talking to the proprietors/partners/directors often confirms what the auditor had been suspecting all along.

But I was wondering: Would this, and other extraordinarily large number of NPAs that we keep hearing about, have happened had we not had that hullaballoo about the bank audits just at the beginning of the season this year? That No value-addition grouse the RBI was making really made the CAs pull up their socks and even mend the holes in them.

I certainly shed no tears for the SBI branch. Two years back, a colleague of mine had got threatening calls from someone purportedly calling from the SBI Regional Office. Speaking in imperious tones, he told my friend to drop the MOC; else he won't find his name on the SBI's panel the coming year. My friend stuck to his guns. He is still on the SBI's panel.

The definition of Value-addition has been drastically revised this bank audit season.

Sanjeev Bedi