Banks have started sharpening their claws to act tough on defaulters as they are poised to get their long-pending rights as lenders to throw out failed managements. Reserve Bank of India governor Raghuram Rajan's promise to give banks more powers in handling the NPA menace has given bank chief executives a sense of new hope when rising non-performing assets are pulling down profit numbers every quarter.
"Banks will start looking at change of management as a strategy to keep the account in good shape," Punjab National BankBSE 7.23 % chairman and managing director KR Kamath told ET. "The finance minister's and the governor's statements have sent a strong signal to defaulters. We expect wilful defaulters to behave better now," Kamath said. Finance minister P Chidambaram, too, last week told banks to deal differently with defaulters.
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