Window dressing and its effects

Ruchi Anand and Associates, internal auditor in India provides best taxation solutions. Window dressing is active from so many years and is still active. It has an adverse effect on economy of a nation. There are so many statements are issued by Government of India, RBI and various bank managements during last over a decade, arguing that they will curb this menace. Despite of all commitments we had noticed barely any action. None of them had taken any serious steps to cut this growing trend; rather behind they have encouraged window dressing to get hefty incentives and easy promotions. They show that there is consistent and healthy growth of banking sector in India.

First of all it is necessary to understand window dressing. Management manipulate financial statements and reports to show more promising results for a period of time at the end of financial year. Reaching the end of the financial year, maximum pressure is mounted on all the officers of the bank in order to ensure that all the targets meet on time. Thus, at the point of evaluation i.e. end of financial year, all banks try to boost their deposit, credit figures through artificial means.

If we turn toward light, banking sector is becoming weaker and weaker and we will definitely reach a stage where financial stability of Public Sector Banks will be at precarious condition, and there will be dangers of collapsing the same. Many banks are unable to give a reasonable wage hike to its employees and meet the pension liabilities of the retired employees.  

It is clear that bank top management, RBI, wherein they say that there is no danger to banking system when asked about their growth, but cry of weak financial status when a reasonable wage hike/pension is asked by employees. Again government intend to curb window dressing. It seems difficult that it will be followed to any logical end.