PNB SCAM

Today people need to understand as to how the big companies are patronized by the ruling govts to help them indulge in frauds for years till they amass huge money so that they can live in same lifestyle after running way from the country. Vijay Mallya, Lalit Modi and now Nirav Modi and his maternal uncle Mehul Choksi are the cases in reference.

Today both - the Congress & BJP are playing politics by blaming each other but the fact remains while it is difficult for a common man and the needy to avail loan from the bank, the rich keep getting loans repeatedly inspite of defaulting to pay back not once but many times for years. Such big wig defaulters are not pressured by banks to the extent of forcing them to commit suicides just like our poor farmers who take recourse to such step under desperate humiliation and constant chasing by the bank. How the 367 LOUs issued on Nirav Modi and Choksi went unnoticed for all these years since 2011?. Out of 367, 211 were issued under BJP govt. Why didn't the Prime Ministers of both the govts or RBI take action based on these alarming transactions? How long the people of india will get cheated of their hard earned tax paid money by the fraudsters patronized by the politicians and the govt in power?
Let it be known that the present govt formed a committee to prepare a comprehensive report on status of NPA with banks before writing off bad loans of big companies and assisted the public sector banks (PSBs) with record Rs 81,683 crore worth of bad loans in the financial year ended March 2017, a jump of more than 41 per cent over the previous year’s write-off amount of Rs 57,586 crore, as per the finance ministry data. The committee has been disbanded after an year of its working as many big sharks which took care of their party interest were going to be exposed much to the embarrassment to the govt.
My point is that people voted for the govt trusting on the chowkidar. In contrast to the write-off amount of Rs 27,231 crore in 2012-13, when banks earned combined net profit of Rs 45,849 crore, the amount of loans written off in 2016-17 trebled to Rs 81,683 crore and the banks combined profits were a Rs 474 crore. Banks have written off a total of Rs 2.46 lakh crore worth of loans in the last five years, the finance ministry data show.
Hence an alarming nexus between the companies and the ruling govts - be it UPA or NDA.
All this happened due to flouting the laid out measures to tackle NPAs or bad loans such as :
i) 1991, Narasimham committee recommends many reforms to tackle NPAs
ii) Credit Information Bureau – 2000
iii) Compromise Settlement – 2001
iv) Corporate Debt Restructuring – 2005
v) 5:25 rule – 2014 -- also known as, Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries.
vi) Joint Lenders Forum – 2014
vii) Mission Indradhanush – 2015 that included strengthening risk control measures and NPAs disclosure
viii) Strategic debt restructuring (SDR) – 2015
ix) Asset Quality Review – 2015 -- Classify stressed assets and provisioning for them so as the secure the future of the banks and further early identification of the assets and prevent them from becoming stressed by appropriate action
It is the cause of worry that the needful was not done as follows
1. Technology and data analytics to identify the early warning signals.
2. Mechanism to identify the hidden and obvious NPAs.
3. Development of internal skills for credit assessment and filing it into the system for wider transparency
4. Forensic audits to understand the intent of the borrower especially when the borrower is asking for more without clearing the previous loan.
5. Submission of loan appraisal, disbursement and recovery report to RBI and the Ministry of Finance to keep watch on banks as well as defaulters to keep track on misuse of loans disbursed.
Both the govts are to be blamed for making way for the misuse and bungling of funds for the reasons which the govt can answer better. In reality it is the govt which is responsible for allowing and assisting the big and corporate borrowers to be liberal with hard earned public money. There are many Niravs and Choksis who are most likely to surface in the days to come. People are most likely to see more politics over it in the shape of blame game as ever and the disclosure of pressure that the banks have to disburse loans to the most favoured of the govt to default.