Friday, December 9, 2022

Banking logic

As of 2021, Indian public sector banks collectively owed approximately Rs 6,17,000 crore in Non-Performing Assets which includes money that has been defrauded by scamsters. A spurt in faulty loans and non-performing assets (NPA) has been threatening the economy for some years now. As of 2021, Indian public sector banks collectively owed approximately Rs 6,17,000 crore in non-performing assets which includes money that has been defrauded by scamsters. Most of the scams bear the same footprint of l the involvement of Bank officials, crooked businessmen and politicians. Notable bank scams include the Bank of Maharashtra scam of Rs 836 crore; Syndicate Bank (now Canara Bank) scam involving Rs. 1,000 crore. Those involved included a former chief manager of the bank. ICICI Bank CEO Chanda Kochhar, her husband Deepak Kochhar and Videocon group MD Venugopal Dhoot were accused of causing irregularities in loans sanctioned by 14 banks such as Bank of India, SBI, Union Bank of India and IDBI to the tune of Rs. 1,875 crore . The other is the Rotomac Pens scam involving Rs 3,695 crore loaned to Rotomac Pens promoter Vikram Kothari. In September 2019 PMC Bank had lent Rs. 4,355 crore through fictitious accounts to bankrupt Housing Development and Infrastructure Limited. An amount of Rs.6000 crore was shiponed off from Bank of Baroda through loopholes and transferred to Hongkong to employees of various banks. Multiple banks including UCO Bank, Bank of Maharashtra and Canara Bank sanctioned lonas to the tune of Rs. 8000 crore to Chartered Accountant Pawan Bansal. Perhaps among the infamous scams include Kingfisher owner and King of Good Times Vijay Mallaya who defaulted over Rs.10,000 crore owed to a dozen banks since 2013 and who fled to UK in 2016 and has since been evading arrest. Another infamous scam involved diamond trader Nirav Modi and his uncle Mehul Choksi, who duped Punjab National Bank to the tune of Rs. 14,000 crore. Modi and Choksi fled India in 2018 despite the scam exploding on national media. The other infamous scam was the ABG Shipyard scam involving Rs. 22,842 crore since 2013. The strange logic is that while on one hand the government has failed to bring all the scamsters to book and attempt to recover the money siphoned off; the law abiding customers who faithfully deposit their hard earned money, are being extorted through various bank charges. The promise to bring back black money from abroad is forgotten and those who made the vow are forgiven for telling a lie. If the government was as fair or as sincere as it sounded, a total of Rs. 6,17,000 crore which have been stolen ought to be recovered. All the while, while failing to nab the offenders or recover the huge amount, the government continues to earn huge sums as GST which also includes charges levied on bank customers on transactions and deposits. There is no pride in earning huge GST revenue through unbridled taxations while the low income and ordinary bank customers groan under their weight. This cycle of stealing from Peter to pay Paul , needs to end for the sake of economic logic, since the bulk of the money goes for pet projects that would be used for political interest.

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