Why reluctance to surgical strike to stop

The Great Indian Bank day light Robbery

chor machaye chor !
5,275 wilful defaulters (+ Mallya) owe banks Rs 56,621 crore

About 11 years ago, Indian Express ran a series of articles under title The Great
Indian Bank Robbery chor machaye chor !on the systematic loot of the banking
system with possible connivance of Bank Officials estimated at Rs.1.1 lakh Crore.
Today the media is going crazy over NPAs of willful defaulters. For vast swathes
of corporate India, it's been an era of financial plunder. Then why
Finance Minister Jaswant Singh called NPAs ''loot, and not debt.

These things have happened in the past also and conveniently forgotten. This
happens as either people loose interest or gets appropriated into the system by the
very people who are targeted by such reports. Whatever it may be, the point is
kicking up such storms is just a hobby and a way to get into limelight with ulterior
motives. Even Indian Express did not follow it up.
Thereafter every successive the government /media is breast beating about black
money stashed away in foreign banks. It is only such ill gotten wealth which is
carted away. Whatever it may be, the point is kicking up such storms is just a
hobby and a way to get into limelight with ulterior motive. When the parliament
passed the a new law to act SARFESI against India Incs mountain of unpaid
loans the Indian express after thorough investigations ran series of five
articles titled Rs 11,00,00,00,00,000.
This is the money that India Inc owes and won't pay back. Here's what it
could pay for: all our defence bills for 2 yrs. Or an expressway in every state.
Or A school in every village
The money that wilful defaulters owe Indian banks.at that time the total amount
owed by wilful defaulters was Rs 6,291 crore ($9.3 billion).
It grew nine-fold over the next 13 years to Rs 56,521 crore.

The split of these NPA accounts is given in the following links :

Click here for CIBIL's list of wilful defaulters
http://im.rediff.com/money/2016/mar/18wilful-defaulters.pdf
Click here for Top 10 wilfil defaulters
http://im.rediff.com/money/2016/mar/18top-10-wilful-defaulters.pdf
Click here: Suit-filed Accounts (Wilful Defaulters) - Of Rs 25 lakh & above

http://im.rediff.com/money/2016/mar/18top-10-wilful-defaulters-25-lakhabove.pdf
Click here for Suit-filed Accounts Of: Rs 1 crore & Above
http://im.rediff.com/money/2016/mar/18suit-filed-accounts-1-crore-above.pdf
reference note No. 11 /RN/Ref./November /2014 For the use of Members
of Parliament ON NPA in Public Sector Banks
https://www.scribd.com/document/250253456/Non-Performing-Assets
If the unpaid loans made by Indias public-sector banks were recovered, they
would be enough to pay for Indias 2015 spending on defence, education,
highways, and health, as IndiaSpend reported last month.
These bad loans, or gross non-performing assets (NPAs) as they are called in
banking parlance, of public-sector banks have crossed Rs 4.04 lakh crore ($59
billion), a rise of 450% since March 2011.

With the spike in loan write-offs and NPAs and a fall in profits spooking the
banking sector, RBI governor Raghuram Rajan has made it clear that banks may
require deep surgery to clean up their balance sheets and put stressed projects
back on track.
One suggestion to tighten things comes from lawyer Dutta, who said the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, needed amendment. Currently we cant initiate criminal
proceedings against the defaulters as the act is civil in nature, he said.

It is pertinent to point out here this is despite merry go round of write offs,
CDR routes . Is it not starling?

So many of the big fish, don't show up on these hot lists. Some escape law
suits. Other defaults are deliberately fogged by accounting practices: so
defaults hide, for instance, as ''projects under implementation.''

I call them TITANIC DEFAULT as the losses on slippage of these accounts

will be huge and large scale infirmities will be exposed. BUT certainly NO
HEADS WILL ROLL, HAS ROLLED unlike in small loans of few thousands
where Branch officials is invariably charge sheeted for not preparing the CR
of a farmer or Housing Loanee or failing to assess properly the market value
of a collateral of one or two lakh rupees.

If we take into account Total loans restructured by Indian banks under the
so-called corporate debt restructuring (CDR) route crossed Rs.2
trillion(2,00,000 crore). In December2012. In the past quarter alone, banks
restructured Rs.24,584 crore of loans, up from the Rs.19,544 crore they recast
in the previous quarter, to reach Rs.2.12 trillion of restructured loans. (The
actual figure for restructured loans may be around Rs.4 trillion as this
estimate does not include bilateral restructuring cases that banks undertake
individually with firms).
The write, off and CDR route has cost the state run banks whooping
exchequer which much more than the GDP ( nominal ) India and its
neighbors and 48 least developed countries in the world . this is extent of the is
great bank robbery which the successive government in power is unable to arrest
other than making popular rhetoric press statements policy pronouncements under
the garb of banking reforms . .
The Cumulative write off loans over the past five years,( i.e. from the period of
effect of 10 bipartite emphasis !) of state-run banks as Rs 106,170 crore( Rs1.6
trillion) is more than GDP of 48 least developed countries. This is enough money
to fund half of India's defence budget this year, is an open secret. What has
come as a surprise, though, is the fact that big borrowers-those who owe more than
Rs 10 crore but have not paid up on time-make up more than three quarters of the
amount in default, data obtained through an RTI application revealed.

A powerful nexus between chairmen of public sector banks, auditors, Reserve

Bank of India and the banks boards is behind the countrys total Non-Performing
Assets (NPA) and wilful defaulters.Maharashtra has more wilful defaulters than
any other state: 1,138, who owe Rs 21,647 crore (Rs 216.47 billion). Next is West
Bengal with 710 and Andhra Pradesh with 567 cases. But in terms of defaults,
Delhi is second with more than Rs 7,299 crore (Rs 72.99 billion).
The high end loan-owners, most of whom are builders, manufacturers or managing
educational or medical institutions, account for 78 per cent of bad banking across
the nation, going by statistics provided by 26 nationalised banks to an RTI query
by a Thane-based chartered account.

It means that people who borrow less pay more in interests and capital to the
banks. But those who borrow more have no liability whatsoever to repay their
loans. Any person who defaults on small or medium loans taken for his house, car
or any entrepreneurial venture has to face such humiliation from bank-appointed
recovery agents and bank officials that it leaves an imprint on his psyche.
However, people who virtually rob banks of crores of rupees go scot free despite
all the half-hearted attempts by the banks to recover the amount.
That is the reason we euphemistically define the acronym CDR as Cruel
Denial of Recoveries and / Consensus delay for recoveries and /or CRUEL
DENIAL OF REVISONS (OF WAGES)
Thus It is an irrefutable fact that cumulatively over the past five years,( i.e.
from the period of effect of 10 bipartite emphasis !) state-run banks wrote off
loans of as much as Rs 106,170 crore( Rs1.6 trillion )
Contrary to the general impression that labour cost and wage expenses are going
up, it would be observed as shown below that over the years, the ratio of wages to
total expenses has slided down. Whey we should oppose:

These gargantuan NPAs will be seen by general public with awe and there is
not likely to be any backlash against these companies. A man on the street
will merely talk as to how foolish were bankers but will not demand any
action against the owners as they had larger than life image and are viewed
with awe.
And these willful defaulters are getting ready to mine the new loopholes of the
new law: no clear definition of whos a wilful defaulter; no prison sentences;
nothing to stop a defaulter from taking over a privatized bank (especially after the
amendments to banking bill banks borrowers can become banks directors) and
paying off debts; and nothing to stop their private life of luxury.
If the spirit behind the new law doesnt match the letter, if this mother of all bad
loans continues to grow, it will squeeze the financial system. In time, it could mean
paying more for your home or car loan, and getting less interest for your savings.

If you are just an ordinary tax-payer, the quintessential man on the street, why
should you be reading the series of exposes in the media time and again why
should you be getting angry? What questions should you be asking? And what
answers should you be seeking. The rich, after all, have always stolen. From the
banks, from governments and, most of all, from the poor. So whats new this time?

You should bother precisely because now there is a difference. The essence of free
markets is fairness of opportunity and accountability. Free markets run on impartial
regulation, prudential norms, protection of investors money from risks other than
what an instrument of investment justifies for the returns promised.

This Day Light Great Bank Robbery euphemistically called as NPA is not
about companies taking legitimate market risks. Its about total subversion of
the principles of free markets. So, here is the first question you should be
asking. Why is it that your bank pays only 4 % or so on your fixed deposits
but charges 10 per cent on your housing loan? Why should you pay 13 per

cent on your car loan? And why is it that you so often read on the front pages
of the pink papers about fresh government bailouts for your financial
institutions? This money, too, comes out of your pockets, your common tax
kitty.

In civilised countries with free economies, banks work on spreads of no more

than two per cent. In India it is four. So, overseas, if your savings bring you
four per cent interest, your housing, loan would cost no more than 5.5 or 6.
Here, you first pay for the inefficiency of your bank, the overheads and the
bloated bureaucracy.

Second, you also under-write your banks Non Performing Assets (NPAs). The
big guys steal, then get write-offs or bailouts. You and I meanwhile keep the
banks afloat by paying that additional spread on our borrowings.

A good question to ask, before that is done, is: who were the people sitting on its
board when these loans were given, where are the defaulters now and do their
personal wealth, lifestyles, match the bankruptcy of their lender? If it doesnt, why
should we tax-payers fund its revival?

But banks are always known to lose money and big banks lose big money. So, if
you still think why you should bother, here is a story former Prime Minister V.P.
Singh used to tell in the Allahabad parliamentary bye-election of June 1988 to
explain to mostly illiterate villagers why they should be angry about the Bofors
scandal.

Your house has been burgled, he would say, and then explain how. When
you buy a matchbox for 50 paise, five paise go to the government as tax. With
this the government builds your roads, hospitals, bridges, schools, buys guns
for your army. This is your money. It has been stolen. Thats why I say, your
house has been burgled.

What should worry us the sheer extent of the exposure to such accounts.
Losses to the tune of Rs 10,000 crores in just two accounts will shake the
whole industry. Even the wage revision due from November 2012 will be
affected It will be the Honest , hard working who will suffer - more pressures
for profits, denial of decent wage hike, no updation of bank pension etc.
The total employees in the banking sector (private as well as public sector)
are about 9,00,000. Do you know that how much loss of Rs 10,000 crores will
work out per employee of banking industry as a whole. It is about Rs
1,11,000/-. Thus, if banks fail to recover from these companies, then each one
of you (each peon, each clerk and each officer in the banking industry) will
lose more than Rs 1 lakh.
The cost of 25% increase in wage load demanded by unions in the 10
bipartite will work out to mere infinitesimal fraction of the recovery of the
restructured loans as on 31-03-2012 and cumulated write off over the last 5
years as stated above. Which would have been otherwise not classified as of
NPAs without costing any additional exchequer to the banks if they have the
will to recover! Is not now our demand is just.
The only bright side of the 1992 scamit revolutionised the market
infrastructure, Too little has been recovered and too many cases are
unresolved, reducing the scam trial to a farce .Justice or Farce?
What a far cry all this is from 1956, when Justice MC Chagla said after the
Haridas Mundhra scandal: After very anxious consideration I have decided that
this enquiry should be held in public. A public enquiry constitutes a very important
safeguard for ensuring that the decision will be fair and impartial. The public is
entitled to know on what evidence the decision is based. Members of the public
will also be in a position to come forward at any stage to throw more light on the
facts disclosed by the evidence. Justice should never be cloisteredit should be
administered in broad daylight. He also decided to take evidence on oath so that

those who gave evidence did so with a sense of responsibility and the knowledge
of the consequences of giving false testimony. The Mundhra enquiry was wrapped
up in two years, including the appeal to the Supreme Court. That record has never
been repeated in the 56 years since that scandal.
Therefore it becomes clear that these massive NPAs well entrenched in the Indian
Banking system is a cancerous growth that represented by unclean economy will
not disappear by half hearted palliatives. It requires a sustained chemotherapy and
drastic surgical operation.
Frequent resorts to amnesties such as waiver, write off, etc must stop. At the
fundamental level attitudinal changes to book the culprit defaulter, under criminal
offence, even though they lie today under the pale of present day legality.
Obviously so long as profits remain as the prime factor, such friendly attitude
toward tax evaders, black marketers, and willful defaulters daylight robber
barons of Public Money, are likely to persist. Hence it is also essential to rearrange
the hierarchy of social and economic objectives consistent with long term interest
of common man otherwise, crony capitalism, and, NPA scams, era of other scams
will continue to grow from strength to strength.
If a starving slum dweller robs some money to feed his family, he is a thief, to be
shunned by society and employee for committing minor aberrations is visited
with major punishments. But if a businessman or politician robs our countrys
wealth in crores, he is merely corrupt or euphemistically given a tag a
defaulter. And those in the top are allowed to go scot-free.
The first are anti socials, thoroughly beaten up in police lockups, ending up
with years in jail and the innocent employees are punished with dismissals,
which in real terms is economic death. The second are gentlemen protected by
hundreds of law and end up building paradises on earth. Double standards,
double talks and unfair methods are the norms that govern this society. Today
the contrast is getting even sharper. The life style of our rulers, willful
defaulters who perpetrate this day light robbery of over one lac crores are
ostentatious. Some are alleged to have owned properties and assets over few
hundred crores. Contrast is the lives of vast masses and displaced workers of
the factories made sick by willful defaulters. Many of them live below the
poverty line.
Liberalisation has meant easy money for the entire elite of the country. While
for the masses a decent income is far more difficult to earn. Ten to twelve hours
of hard toil each day doesnt even bring sufficient food.

Instead taking drastic and stringent action is taken against defaulters such
as: confiscation of the properties of wilful defaulters, imprisonment, and
blacklisting for all future advances and loans the government and bankers
have resorted often to bail out packages, including this preposterous ,
retrograde step of setting up of holding companies as mentioned above to
raise capital to provision for NPAs present and future, which is bound to
cause increase in NPA time and again
On the issues wilful defaulters, in an first television interview to Times Now.
Modi once again gave a convoluted reply, pointing to the malfunctioning of
the previous UPA regime.
With the spike in loan write-offs and NPAs and a fall in profits spooking the
banking sector, RBI governor Raghuram Rajan has made it clear that banks
may require deep surgery to clean up their balance sheets and put stressed
projects back on track.
One suggestion to tighten things comes from lawyer who said the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002, needed amendment. Currently we cant initiate
criminal proceedings against the defaulters as the act is civil in nature, he
said.

Why reluctance to surgical strike & sustained chemotherapy to end this

cancer and recover white money stashed as NPA which is much more then the
black money recovered so far costing the exchequer dearly putting common
man into untold miseries?
Isnt it time to abandon the charade?
Those who take the meat from the table
teach contentment.
Those for whom the taxes are destined
demand sacrifice.

Those who eat their fill speak to the hungry

of wonderful times to come.
Those who lead the country into the abyss
call ruling too difficult
for ordinary folk
-Bertolt Brecht
Note : photo to this article An electrician puts lights on the logo of State Bank of
India at its main branch in Mumbai, India. The money that wilful defaulters owe
Indian banks has grown nine-fold over 13 years
By
S.Srinivasan
Retired Bank Unionist