Whats the remedy? Will an overhaul of the legal and enforcement system help?
Yes. Absolutely. We need one enforcement division and then the legal reform. If the legal reform and the enforcement division don’t exist, the banks are going to do the same thing and the bubble is going to burst someday. [A typical public sector bank seems to think], ‘As much as possible let me postpone, let the next guy who is taking over the bank pay the bloody penalty. Let me enjoy.’ Why are the financial institutions not facing the same kind of problems like the banks? What is it that they are doing right? Companies like ICICI and to some extent, IDBI, but not IFCI, are doing much better because they are able to take advantage of the bigger capital that they have. And they are efficient at targeting the customer as against doling out funds to everybody. These companies don’t grow just like that but rather in a focused way. Companies like ICICI have visionaries like K V Kamath at the helm. He is taking care of what’s happening outside, the problems, the pitfalls, how to recover, no
