Wait and Watch

In the past few years , there often was the criticism that the RBI was not reducing the the primary lending rate due to which the cost of borrowing was high for the industries. The government too wanted the interest rate to go down citing the need for faster industrial growth to generate employment. The RBI was more sinned against than sinning in this regard  maitaining that its main responsibility was to control inflation.

The mega bank scams involving big and mighty industrialists have proved that high borrowing rate should not be an issue since  there is no intent to repay the loans !

According to a news item in The Economic Times today,the collateral damage across markets and the banking industry arising out of the mega PNB scam  is around Rs 70000 crore in market value for the PSU banks and about Rs 40000 crore for the government. Can this loss  be written off as mere valuation loss ? There is also in addition the loss of Rs 11,300 crore for the PNB and other lenders plus about Rs, 3000 -40000 crore loss from the Rotomac fraud case.


 Extradition of the big cats who have fled the country  are not going to easy and quick. Imposing travel restrictions on promoters of defaulting companies is stated to another option. Even these  measures are considered by some as harsh enough take a toll on credit disbursal.

In the mean time,  people whose  money has beenn swidled can do nothing but wait and watch.

Where are we heading ?

Another default of bank loan to the tune of some  4000 crore rupees has been reported by another nationalised bank  involving a  Kanpur industrialist . He is said to have been sanctioned the loan as export financing but utilised the loan for other purposes.

This case too will follow the same ineffective process of raids, investigation, filing of FIR, arrest of some persons and their immediate bail, court proceedings etc over long periods of time. In the after math, there will also be the usual blame game by political parties.

Where are we heading ?

Unscrupulous elements in the path to becoming a strong global power

In Novemeber 2014, I wrote a blog  following up  the then Governor RBI's  comments on some Indian businessmen's propensity to cheat the banks from whom they have taken loans giving rise to stressed assets , popularly called Non Performing Assets(NPAs)

The new dispensation in the governance of the country since 2014 has attributed the  NPAs of nationalised  banks  (estimated around Rs. 6,41,057 crores in 2017 or Gross NPA ratio of 12.47 of  total assets),  mainly to the lapses of the banks' management in not enforcing the recovery of loans sanctioned to  big business houses allegedly on the directions of the previous governments, even as   some major defaulters of bank loans have  fled the country after 2014 !.

The latest is the fraud on  Punjab National Bank to the tune of about  Rs.11,300  crore by a big business house in the diamond trade, whose kingpin too has bolted away. These cases perhaps demonstrate how it is easy  to commit  fraud in India, as much easy as it is for doing business in India !

Spokespersons and analysts say that the fraud on  PNB  is due to systemic failure.Any  system,  however perfectly designed,  will ultimately involve human interaction in operating it and that in the case of a massive financial fraud like this, it can not be just a single individual within or outside the organisation.

Our methods of investigation and legal action to book the culprits  are prone to long  delays and appeals, whereas in cases like financial frauds the conviction has to be quick and salutary.

To solve the NPA problem the present government is proposing to enact the Financial Resolution and Deposit Insurance Bill to enable the recapitalisation of banks to mitigate the NPAs. However, some provisions of this Bill are said to  compromise the interests of the depositors and give the government absolute power in deciding the the fate of the banks if they go under.

The path to becoming a strong global  economic power is not going to be easy with unscrupulous elements

Executive Position

In most democracies, the separation of powers among the legislature, executive and judiciary is well defined and respected. Occasional transgressions do take place however but then these are quickly resolved .

Within the executive , there are are two pressure groups - 1) the political bosses as ministers with joint responsibility to the legislature and 2) the bureaucracy with constitutional safeguards for the executive functions they discharge under the direction of the political bosses.

 The bureaucracy's  selection, appointment and service conditions including disciplinary action for  misconduct are  all well enshrined in a plethora of rules and regulations with a good amount of objectivity built with the involvement of UPSC and Administrative Tribunals.

Over the years however, there is a growing perception that the mutual relationship between the political bosses and the bureaucracy has got strained. Bureaucrats not in the good books of  the minister are transferred even when there is the system that at and above the Joint Secretary's level the bureaucrat is " selected " by the minister to work under him from a panel of eligible officers. Other instruments like the PMO too have become power centres for postings and transfers.

Then there is the direct interaction between the minister and the bureaucracy where the latter are exhorted to implement plans and programs and make them  a success. Is this a strategy to make the bureaucracy a scapegoat if  the plans /programs fail to deliver the goods.

 It may be remembered that there was in the past a demand for a committed judiciary.

The Angry Husband - Part 3

The Angry Husband - Part 3

Ram Gopal has gained strength from strength in conducting his household affairs as well as in his relations with neighbours.

 When he became Chairman of the Municipal Committee, he chose the other office bearers carefully,  appointing  only those who toed his policy and programs on cleanliness, transparency, vegetarianism. Loyalty to his own self was a crucial factor. Similarly, he took care to ensure that some public bodies like the city library, the Art Council, etc., would be headed by new incumbents who shared his philosophy.

  He monitored his colleagues’ work closely and did not reprimand/criticise them openly if found wanting in performance but quietly changed their portfolios.

Counter-views on his policy and programs  were  aggressively challenged and dubbed as reflecting anti- civic sense and even asking those who aired them to move to other cities.

He was careful in creating and maintaining a popular image of him in the minds of the public by addressing meetings regularly even on matters pertaining to the other office bearers. His colleague office bearers missed no opportunity to sing his praise. 

The Municipality had been a hot- bed of corruption and bureaucratic malfunctioning. His first task was to root out corruption and bring about accountability of the Municipal officers.  This alone brought him many admirers. Delays still occurred in settlement of citizens’ cases but the citizens were ready to suffer the delay in the belief that corruption has at last been eliminated.

The previous members of the Municipality and other powerful businessmen who were their patrons and beneficiaries were systematically reduced to low importance.  Many of them had several skeletons in their cupboards and Ram Gopal gained a lot of public acclaim initiating court cases against these persons.

His personal integrity and zeal to transform the city to conform to best international standards is conceded even by his opponents as unquestionable. However, it is marked by one blemish, i.e., some elements of the citizenry have taken upon themselves the responsibility of punishing those who either showed some reservation or reluctance to abide by his philosophy. The question as to why he is silent on this and why no action is being taken to rein in these elements looms large in the minds of many. 

The Angry Husband -Part 2

Note. In August 2015, my blog " The Angry Husband" appeared. In the year or so that has since lapsed, the Husband  has become a hero, full of confidence and ambition. Read on "The Angry Husband - Part 2 "  below.

                             The Angry Husband  - Part 2

Ram Gopal’s immediate neighbour has a long standing dispute over a small patch of land in Ram Gopal’s backyard and makes it an issue at every conceivable opportunity. The previous patriarchs of Ram Gopal showed extreme patience and tried to convince the neighbour with documentary proof etc that he has no claim to the patch of land. Notwithstanding all these, the neighbour would take recourse to direct action like crossing the backyard fence in the night and throwing crackers to scare the family. 

In the be ginning, Ram Gopal kept his cool and pursued a policy of friendship. He even invited the neighbour to a function in his house and wished him on his birthday. But as the neighbour’s antics continued unabated, Ram Gopal’s patience wore off.  He thought of a plan to isolate the neighbour in the village community by personally explaining the unreasonableness of the latter’s claim to a portion of his land. Soon, he won the confidence of others in the village and, one night, to the surprise of everyone in his own house and definitely to that of the neighbour, he turned the water hydrant towards the neighbour’s backyard and completely waterlogged it.  Nobody in the village showed any concern for the loud breast- beating protest of the neighbour.

As a result of this daring action on his part, Ram Gopal’s image in his own home and in the village rose sky-high.  All  conceded that he was a man of action who would not deter to strike when the situation demanded. Ram Gopal’s self- confidence grew and he now clearly understood the dynamics of success and fame. He is now considering to contest the election for Municipal Chairman.

Whither India

The Indian citizen is a worried man today. He finds poor response to his need for a peaceful, happy and justice based life. As of  his wont, he first blamed the political leaders and used his power to change them through elections and found them no different from one another. His next target was the system of governance and the men who operate it- the beaurocrats; he found them in  nexus with politicians to deny him his rights and rewards. His faith and hope in judiciary failed him as he got vexed with its delay and procedures. In the absence of a public health -care system, the private hospitals and  practioners of medicine  fleecing him  through unwarranted and costly diagnostic tests and procedures . Last but not the least, the  chiefs and senior leaders of the armed forces, para-military and police, even when the nation is facing threat of infiltrators and militants, spend time in blame game both in operations and personal issues like promotion . Even in his food preferences,there is advisory as what not to eat, the women and girl children are not safe. 

Is there hope still for sunny days?