Stressed Accounts: Role of Promoters' Family |
| When going is good , everything looks good. The society, Relatives, Friends, Peers, Employees and Colleagues give lot of respect and applause. Everything goes so smooth and fast that it is impossible to imagine about the possible tough time. As called quite often ‘the Charity and challenges begin from home’, exactly same thing happens in business too when the turbulent time starts. Our own people start doubting the capabilities and even the past achievements. The promoters gradually get replaced by new set of people who are not very positive. Everything is doubted and non communication becomes the most popular tool. |
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| Generally it is experienced that the doubts on the capabilities of the promoters lead to fear and hence the situation starts deteriorated day by day. The Bankers ask certain information, Data and explanation which are perceived to be potential threat for the borrower , who , out of fear , either avoids or gives wrong information. The cascading effects of one misinformation is so much that very soon both borrower and lender who are basically partners part ways and start taking actions which is in their short term interest. No one is concerned about the unit, its’ employees and other stake holders. The situation becomes so worse that the unit which was bread & Butter for all becomes a liability and planning starts for getting rid of that poor sick unit. |
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| Family members of the promoter are one of the key stake holders and hence their role is very important in deciding the fate of the stressed units. It is very easy to discard an ailing unit which is not generating any more revenues but to revive, a lot of guts and hard decisions needed. An ailing unit , if treated as family member by the promoter, has great potential to revive. In general, it is noticed that the wealth generated by the unit which is not doing well now, has only one way. |
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| Neither promoter nor his family would ever return back ,even a very small part of such wealth, to revive the unit. No one would ever part with the luxury for a short period and that is the basic reason in lot many NPA cases. If the promoters’ family alongwith other stake holders put complete faith in the troubled entrepreneur, the probability of revival is very high. There is no system to involve the family members in ailing unit as the communication is always in legal language by the lenders and hence nothing revives. |
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| Although mistakes are bound to happen but Nobody is going to repeat the same mistakes next time if chance given. Business has uncertainty as its’ basic character but that given fun too. |
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| In my view, the recovery process should be avoided to the maximum possible and the lenders should start communicating with other stake holders. If proactively handled, the unit has some probability of revival. Family members if ascertained properly can play a very important role in coming out of the tough situation. A promoter with established track of entrepreneurship can definitely bounce back if chance given and intentions are good. |
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| Please don’t mistake me that all the promoters have good intentions. |
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