Why Indian banks allow loot by a Nirav Modi and Vijay Mallya
As expected more skeletons are tumbling out of our wilful loan defaulters' closets following the latest in the series of scams by Nirav Modi and Vipul Kothari. The details, however, cover the cumulative expected overall default to the tune of Rs 1 lakh crore by defaulters of over Rs 25 lakh only.
Also, they do not touch those suit-filed accounts of defaults between Rs 5 lakh and 25 lakh, which should be assessed too considering that an ordinary, honest salaried employee is expected to start falling in the direct taxation slab with just about Rs 5 lakh.
Not just this, the names of all such wilful defaulters must be made public by all the banks so that these people cannot dupe other private lending institutions or agencies, including "generous" friends, in public and national interest.
While preparing for a post-retirement innings and inspired by the highly promoted MUDRA loan scheme since 2014, I walked into my bank manager's office rather confidently for Tarun loan under MUDRA scheme. Not only had I completed all the documentation for a humble start-up project in my mind, the status of all of my income tax returns having been filed 40 years of my active career were on my side.
However, the same was neither approved nor any reasons of rejection were shared by both the refinancing government bank and the intermediary processing banker. My idea of supporting PM Modi's vision of StartUp India got grounded even before it could be started.
I followed up with the bank a couple of times but was eventually told my application was rejected by the lending bank - in this case, must be SIDBI - without providing any reason.
A follow-up with mudra.org.in too gave only one piece of advice that I "need to discuss with my banker", as Mudra was only a refinancing scheme and did not directly deal with the borrowers. A renewed effort with my banker - with whom I had had a very neat and clean record because my only savings confided with it was for my superannuated phase - too did not help. And as an ordinary retired corporate executive I did not want to follow other possible "recourses" available, including political and media, because of my faith in the honest administration of an honest scheme of the prime minister. Also, I could hardly risk my limited savings because of other important concerns such as emergency medical expenses.
The flip side of the story is equally interesting too. Forced to stay on in the National Capital Region to support my family for some anonymous threats to their safety besides mine, I had to shun some very attractive outstation postings and manage my meagre finances on heavily taxed loans on my credit card accounts.
These private bankers that were "very kind" to stand by me, when no one else seemed prepared, were also equally "menacing" when it came to collecting their EMIs, if they got delayed.
For the sake of brevity, in both the situations - from "menacing ways" to recover EMIs on time to the completely indifferent response while considering a request for MUDRA loan by state-owned refinancing scheme.
With so much having been written and debated, how could the Nirav Modis, Vikram Kotharis, Lalit Modis, Vijay Mallyas (and many new names likely to get exposed in the days to come) manage to successfully manipulate our fallible politicians, banking technocrats, bureaucracy and other watchdogs? And how could one just charge the NDA or the UPA governments with connivance or carelessness? The fundamental questions of how to stem the rot, to ensure recovery of the huge embezzlment of the poor taxpayers' money seem to be getting pushed to the backstage until a fresh sensation emerges to divert public attention.
At a time when all around digitisation of most records have been achieved and Aadhaar covers nearly 80 per cent of our population besides the PAN data of all such borrowers, it should not be difficult to ask all the banks to list the names and details of the defaulters of NPAs above a minimum level of at least say Rs 10 lakh of an outstanding or unpaid loan.
Details of all the sensitive observations by any of the internal and external/statutory audit deviations highlighted from time to time, incidences of "time-barred" as well as recommendations/sanctions by those "devoid of appropriate level of authority or unauthorised officials" having authorised the same (LoUs or the designated, legally acceptable letters of authority) - including a future mechanism for a time-bound recovery of all the outstanding repayable - must also be made public in the interest of all direct and indirect tax paying electorate of the country.
The build-up of any disproportionate assets of all banking staff members and the chains of chartered accountants promoting such defaulters need to be monitored very effectively by the government.
The question that arises is do we still require a strong Lokpal at the Centre or not?
If the strings of scams - 2G, 4G, and coal auction - were enough to spur Anna Hazare's first major nation level anti-corruption stir post-2011, the recent events unfolding at banks are a befitting prelude to his forthcoming agitation from March 23.
Does India need some more jolts like these before any really strong anti-corruption institution finds a final "autonomous" place in India's judicial-cum-executive organogram of committed citizens?