Banking frauds and what after that
Harshad Mehta fraud. Ketan Parekh scam. Home Trade scam.
All of these frauds had a few things in common. Money belonged to all of us – through the public sector banks. All 3 of them were ‘reconciliation’ case. Investment accounts were not being reconciled.
Reserve Bank of India could have developed a debt market with many players. A Wholesale Debt Market with banks, insurance, mutual funds, trusts, pension funds, hni – with a ticket size of say Rs. 5 crores and a retail market with a ticket size of Rs. 1 would have been the MOST SENSIBLE thing to do. Oh no, RBI did not want SEBI to be able to do ANYTHING in the debt market. So nothing sensible came off the scams. Oh yes MMS was in power during all these scams – he was AT LEAST the governor at RBI if not higher! No, he did not do anything.
Kingfisher. Gitanjali gems. Videocon.
Clear frauds where the banks were hand in glove with the promoter. Yes in case of Kingfisher there was political involvement too. I know the bankers who were forced to lend. I can guess who is at the other end in the political side – but suffice it to say “UPA”.
In case of Videocon it is a clear case. V got money from Icici bank. They invested in a company called Nu Power which is run by the husband of the CEO of Icici bank. Not sure if she ‘bought’ diamonds from Gitanjali. However, the V case is very clear. For the board to say “collective responsibility” is amazingly stupid. When India wins we praise Virat Kohli, when India loses we thrash him. As simple as that. Of course there is collective responsibility, but when Icici bank gives a loan of about Rs. 4000 crores to V – including some money to an entity in Cayman Island it is amusing.
Lets face it. In 1989 I made fun of a Senior GM of a psu bank for lending money to V just because V had a huge (huge again) ad budget for his television and other business. Pathetic number crunching was done by this psu bank (not yet named). He sheepishly admitted that when a company is so well known they think that they will repay. I told him “one day this will be an npa”. Since then I am not in touch with this banker and I have no clue about the fate of the loan.
V has a lot of influence – at least had – and got JVs done with our oil psus for projects abroad. No clue about the fate of those projects. I guess falling crude prices will be the reason given for those NPA.
V case and Gitanjali case seem to be clearly open and shut cases as far as Chanda is concerned. A case has been filed in the V case by the CBI. Summons will happen of course. Will jail happen?
Who will decide that? CBI? SFIO? Courts? or PMO?
Well I spoke to a few people on the road – and they are convinced that like Harshad, Ketan….these current cases too will be discussed for days on end. Like all the frauds and scams this too will be lost in the woods…
2022: Chanda will retire as MD of Icici bank.
One security guard will be suspended for allowing Deepak to come into icici bank.
After all we have ‘Bali ka bakra’ NOT ‘Bali ka sher’ or ‘Bali ka haathi’.
Sad. But true.
CK
The ‘loose’ statement by the board to say “collective responsibility” clearly demonstrates their lack of understanding of the difference between ‘responsibility’ and ‘accountability’. Miserable indeed!
subra
that means for Kingfisher loan by SBI all of us – including account holders are responsible…and thus NOBODY is accountable 🙂
Krish
Projects or Contracts funding is one horrible world. Banks have no capability to assess the cash flow or profitability of the projects. Still it beats me that they extend the loans with least understanding of risks.
3 years ago, I had advised not to accept the contract upon winning a particular bid. Knew very well that executor would incur loss. Alas, people branded me pessimist and trouble maker. Sadly, company incurred so much loss that it had to be closed down after few years.
CK of ICICI must have earned Crores being long time CEO. It still beats me that they want to jump in to thousand crore league and not satisfied with hundreds of crores.
If CEOs family loan could turn into NPA, what about ordinary guys loan. Ofcourse all the big corps got an expertise in harassing ordinary citizens.
shinu
good to see that MMS & UPA is ensured its pie where NAMO and NDA are beautifully sanctified… comeon sirji.