Daylight Robbers ? Some Yes !
Context :
Banks wrote off ₹10 lakh cr in last 5 yrs: FM / FortuneIndia / 20 Dec 2020
Extract :
Finance Minister Nirmala Sitharaman has said that scheduled commercial banks (SCBs) wrote off ₹10,09,511 crore in the last five financial years.
The data shows wrote off :
# SBI …………………………………………….₹ 19,666 crore,
# Union Bank of India (UBI), …….. ₹ 19,484 crore
# Punjab National Bank ……………… ₹ 18,312 crore
She also attributed the decline in the NPAs to the government’s strategy of recognition, resolution, recapitalisation and reforms.
With regard to the details of the top 50 loans that were written off, the RBI says it doesn't maintain account-wise information on written-off loan accounts, said the minister.
In FY 22,
# State Bank of India (SBI) have written off bad loans worth ₹7,782 crore
# Punjab National Bank (PNB) at ₹3,441 crore
# Union Bank of India at ₹2,750 crore.
The list of wilful defaulters as on March 31, 2022,
# Mehul Choksi's Gitanjali Gems Ltd ……………….₹ 7,848 crore,
# Era Infra Engineering Ltd ……………………………. ₹ 5,879 crore
# Concast Steel and Power Ltd ………………………. ₹ 4,596 crore.
# ABG Shipyard Ltd……………………………………………₹ 3,708 crore
# Frost International Ltd owes ………………………….₹ 3,311 crore.
MY TAKE :
It is a pity that the Cabinet Ministers to whom following email was sent, chose to ignore the same !
Ø NPA ? or is it NPB ? …………………………………..[ 08 March 2016 ]
Extract :
NPA = Non Performing Assets ( bank loans not being repaid )
NPB = Non Performing Bankers ( bank officers not being prosecuted )
Recently , Supreme Court asked RBI for a list of entities , who are defaulting on loans of Rs 500 Crores or more
Suddenly , a few banks started publishing lists of their own loan defaulters
What is the big deal ?
Several thousand Cooperative Housing Societies in Mumbai , have been , routinely publishing on their Notice Boards ( equivalent to the web sites of the banks ? ), names of society-members who have failed to pay their monthly society charges ( includes Municipal Property Tax ) - including cumulative arrears
They have been doing so for years . I don't know if Model Standing Orders or Cooperative Society Act requires this
But no member seems to object this act of " Name to Shame " !
What has prevented banks from routinely declaring on their web sites :
* Complete list of all loan-takers ( Companies/ Individuals/ Trusts / NGOs etc )
* Full details of loans ( amount / duration / interest rate / collaterals / repayment schedule / sureties etc )
* Names of bank officers who scrutinized and sanctioned loans
* Cumulative arrears ( shown graphically )
* Other entities ( including other Companies / Individuals ) inter-connected with the defaulters
* Details of Notices sent / Court cases filed / Recoveries made / Blacklisting done , etc
After all , most banks have PUBLIC as shareholders and therefore , need to be covered under RTI Act
If a bank is owned ( partially or totally ) by any government ( Central or State ) , it is covered under RTI
So , why this secrecy ? Why this dragging of feet to take prompt action against defaulters ?
I recently heard of a Cooperative Housing Society in Hyderabad which has solved the problem of members defaulting on payment of society charges
In members' flats , Society has installed ELECTRONIC DIGITAL PREPAYMENT METERS
On 1st of each month, a member must key-in the amount ( of Society charges ) in the Meter and authorize deduction from his bank account ( like Mobile Wallet , in collaboration with many banks concerned )
Failure to do so will immediately result in automatic cutting off the electricity and water supply to that flat !
I suppose Andhra / Telengana State Cooperative Society Act permits this. Why progressive Maharashtra does not ?
It is no Rocket Science to extend the application of this SIMPLE TECHNOLOGY to bank loan defaulters !
By automatic freezing of personal bank accounts of ALL those who signed the loan document ( takers & givers ) , the moment any repayment instalment
becomes overdue by ONE DAY ?
And automatic / instant revoking of PASSPORT , without having to approach Supreme Court ?
I hope RBI governor , Shri Raghuram Rajan , gets to read my blog and floats a Request for Proposal to Infosys / Wipro / TCS etc
With regards,
Hemen Parekh
hcp@RecruitGuru.com / 28 Dec 2022
Related Readings :
Ø Rs. 200,000 per debtor ? ………………..[ 16 Aug 2011 ]
Ø Passports………………………………………….[ 07 March 2018 ]
------------------------------
Ø Bank Re-Capitalization ? …………………[ 23 June 2015 ]
Extract :
Here is a layman's understanding :
> Bank executives give Rs 4 Lakh Crores worth loans to Industrialists / Businessmen ( who , sometimes happen to be close relatives / friends )
> Bankers " forget " to examine past records of loan-repayments by these individuals
> Banks do not share among themselves info about " black-listed " borrowers
> Banks " forget " to inquire if a loanee is a " Benami " company
> Banks do not incorporate stringent clauses in loan agreements (on purpose )
> Banks adopt " Forget & Forgive " approach to defaulters
> For loan recovery , bankers wait for other bankers to take the lead
> Before taking action , bankers check-out with people in power
> When sinking under the burden of NPA , bankers run to Government of India to bail them out through " Bank Re-Capitalization "
> Government oblige by giving money to stressed banks, so that they can survive
> Government rationalize its bail out by saying, " depositors must be protected " . Sounds so reassuring !
> Government then goes out and raises taxes ( direct + indirect ) to balance its books ( Current Account Deficit ? )
In a nutshell :
> Eventually , honest tax-payers foot the bill, one way or the other
> 7,000 + loan-defaulting swindlers spend vacation in Switzerland with family ( and their politician friends ) - till they are ready to borrow more !
> Bankers vie with each other to " Re-Schedule Payments " and advance fresh loans to pay off old loans ( Rs 4 lakh Crores of NPA ).
If EU / IMF can do this for Greece , why cannot we ?
> Government will take pride in " Bold Banking Reforms "( to please IMF ? )
> As a Nation , we are very compassionate ! We cannot let any institution die !
We are obsessed with keeping it alive at any cost . We must , forever , keep it alive with artificial ventilation / blood transfusion !
It is time to re-think :
When a person or an Institution just cannot be kept alive , it must be allowed to die , in a dignified way !
Would it not be far better to protect the small bank-depositors by returning their deposits , rather than
infuse Rs 4 lakh Crores into these banks , by way of re-capitalization ?
Am I missing out on something that economists know better ?
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