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Submitted by SAMEER MOHNOT FCA INDIA +919414056815 on
Basic Principles Governing a Banking business is to maximise its Deposits and to optimally utilize these Deposits for earning maximum profits to safely return the committed interest for the money of its depositors and to plough back rest of its profits for further loaning and accumulation of Productive Wealth for banks. Procedural convenience like borrower information and monitoring mechanism cannot take the front seat unless and until the clearly measurable historic outcomes defining the strong fundamentals of borrowers(insiders) are fully satisfied with by banks. The Concept of Prudence and Independence need to be followed by bankers while practising insider lending. When related lending is adopted by keeping the bias out of picture and rule of law as a litmus-test, the insider lending will definetly promote fast track financial development.On the other hand, when related lending is adopted ruthlessly without going into pre-checks of the viabilty/feasiblity,Crony Capitalism coupled with Corruption is given birth. As a saying goes, " What you will sow same you shall get".Thus it is for bankers to decide whether they will create Crony Capitalism or Ploughing Capitalism.