which may show the direction in which a company’s operations will go and whether there is inherent resilience in the promoters and the project to face rough weather and come out unscathed. 25. While diligent appraisal is a major factor in eliminating dodgy borrowers, subsequent monitoring also plays a vital role in identifying potential frauds.
In many cases we find that the discovery that stocks have been clandestinely sold, diversion to related parties and siphoning off of funds have taken place and documents provided had been fabricated, is made after the account shows stress and becomes an NPA. Any action taken at that stage is as useful as locking the proverbial stable doors after the horse has bolted. 26.