NPLs and profitability

Writing under the title "NPLs and profitability" in your issue of 05 January, 2011, Dr Shahid Hasan Siddiqui has so wonderfully summarised crux of the issue with the words: "...... neither the nationalisation of banks was the root cause of all evils in the banking sector nor privatisation alone is the cure of all diseases."
It is painful to note that even after witnessing the recent banking upheavals and its fall outs in some developed countries, particularly the US, 'banking' is taken for just another busineess of and by free enterprise A trading, manufacturing or a service providing enterprise normally belongs to the owners (shareholders) and business creditors. They stake money for such enterprises.
Risk is theirs. Reward they reap. As against this, bulk at stake in bank's lending and investments is contributed by the depositors. The depositors are least connected with profitability of the banks they have made deposits with. Dr Shaihd asserts in his article that if the Banks in Pakistan had paid the same average real rates of return to depositors as was paid to the shareholders between CY01 and CY09, the depositors would have received an additional payment of Rs 900 billion.
The sort of regulatory provisions, which deal with the way the banking business is conducted, including hiring, baptizing and placement of Banks officers, leaves much to be desired. The sort of State Bank's regulatory framework, including audit, are not just OK. As pointed out by Dr Siddiqui, things need to be taken more seriously. It should not be lost sight of that we just don't have the resources to bailout banks as the US etc could and mustered.
The sort of changes in Prudential Regulations, allowing Banks to go by this or that percentage of forced sale value of collateral value of the security, for purposes of preparation of their accounts, appears to have emanated from the mindset on profitability declarations by the banking sector. With change in culture and complexion of State Bank, as a matter of routine, one now finds yesterday's commercial bankers adored on the central bank's cushions and the yesterday's central bankers leaving otherwise cozy jobs for commercial banks' styles and perks. Such issues need to be addressed by people of the specie the writer is through the media.
Also to be re-looked is what and how a bank officer should be, for he can and, in fact, has a lot ado with NPLs. I am told that at one time occupying State Bank's top slot, later have a new Bank blossoming on our scene, had time and stamina to regularly get out and sip tea sitting on the cracking chairs in Jodia Bazar. In so doing, interest of the bank he served was to the core of his heart. It is not the late night parties attenders with tongue in cheek and yankee style English speaking, drowned into tautologies from foreign institutions' work manuals, far off from realities of business and life of the people around, that could help play the game. Let there be a debate on this, which should be participated by the civil society.