This business of money games !

Break the vicious circle

"Na khayenge na khane denge" It is gratifying to hear Prime Minister Narendra Modi promising "strict action" against those engaging in financial manipulation and tight monitoring and surveillance to guard against misuse of public funds. The Prime Minister's reassuring words were heard at the YES Bank – Economic Times Global Business Summit in New Delhi on February 23 against the backdrop of the Rs 11,400 crore Nirav Modi scam involving one of the country's top public sector banks, Punjab National Bank, and the arrest of Kanpur businessman Vikram Kothari for loan defaults of over 3,500 crore. Should we take the Prime Minister's promise of action this time seriously? I keep my fingers crossed.
According to reports, the number of bad loans to banks grew four-fold during the 2013-2017 period amounting to more than Rs 1 lakh crore as on September 30, 2017. This figure relates to people or companies characterized as "willful defaulters". That is, the defaulters who are unwilling to pay despite the borrowers' paying capacity. Here lies a catch

The challenge of cleansing banking system ! The RBI data shows that 86 per cent of bank frauds for 2016-17 are linked to advances. It was 99 per cent in the PNB case. This points to collusion with insiders.
These shady affairs are apparently part of the larger nexus phenomenon of power-wielders and business operators whose sole aim is to amass wealth at the cost of the public exchequer. More enterprising among the power-wielders and businessmen have managed to tuck away their pay-off booty in safe havens of foreign banks overseas. This is all part of ordure power management.
Ironically, this business of money games is conducted under the portrait of Mahatma Gandhi amidst the high-sounding national creed of "Satyameva Jayate" inscribed below the Ashoka emblem !
Looking at the nature of this on-going "loot scenario", corruption today seems to be institutionalized. From sporadic cases of malpractices, graft and frauds have become part of the politicoadministrative- business-criminal nexus of public life.

Pay off booty in safe havens ! No wonder, a large number of scams and scandals sit "at the apex of a mammoth pyramid of corruption". Black money, poll malpractices, bureaucratic obstacles, negative mindsets, petty bribery, tax evasion, manipulation in transfers and appointments – all form a part of this cesspool of corrupt practices.
I still remember Prime Minister Modi's thundering words of "Na khayenge na khane denge" against the backdrop of scams and scandals of the Congress-led UPA establishment. He even promised to bring back massive scam money tucked in overseas foreign banks by scamsters and deposit Rs 15 lakh in every Indian's personal account. Like my fellow countrymen, I am still awaiting that magic deposit in my starving bank account as our honourable Prime Minister is completing four years of his high-profile job of the world's largest democracy! Prime Minister Modi is well-intentioned. His main problem, as I see it, is one of growing gap between what he promises and his action on the ground. Regrettably, he does not seem to realise that this is affecting his credibility despite his popularity graph still being high! His advantage today is the absence of a credible alternative on the national scene. Though Congress President Rahul Gandhi is shaping well, he has still a long way to go to take on Narendra Modi single-handedly. A lot depends on the unity of all non-BJP parties with a common minimum programme for the 2019 Lok Sabha elections.
Be that as it may. Prime Minister Modi should have reasons to worry about the latest report from Berlin-based Transparency International. In its Corruption Perception Index-2017, India has fallen two notches. From being ranked 79th in 2016, India is now ranked 81 of 100 countries deemed as being the most corrupt.
India ranking is worse than those of China and Bhutan but better than those of Pakistan and Bangladesh. The index ranks the countries by their perceived levels of public sector corruption according to experts and business people.
It may be noted that this analysis was done before the multi-crore PNB fraud and the Rafala deal details became public. It is quite possible that India might drop further down in the rankings if these two scams were taken into account. The 2017 report, however, clearly states India is among the "worst offenders" in respect of graft and press freedom in the Asia-Pacific region. I expect Prime Minister Modi to take these observations of Transparency International seriously.
The BJP could dismiss the Transparency International report as "flogging the dead horse of demonetization". But it is time the saffron party looked within and stopped following the footsteps of the Congress in power games.
The Transparency International report says that improvement in performance can only be made if there is a strong political will for change and if a comprehensive strategy is adopted. Looking at Prime Minister Modi's track record of the past four years, he does not seem to have worked out a comprehensive strategy to root out corruption from the system, notwithstanding his brave words at public fora.
The moot point is: where do we go from here? The main challenge before the nation is to break the vicious circle. This will require radical reforms at all levels of governance and shedding of secretive functional tendencies among bureaucrats, politicians and businessmen which enable them to thrive in the system to the disadvantage of millions of honest tax-payers.
Only massive surgical operations can cleanse the system and keep the nation on healthy lines. We can set things right by restoring the functional autonomy of the institutions. Checks and balances in the system can be established by ensuring functional transparency and accountability by power-wielders in those areas wherein "power is exercised and to those who are directly affected by that power".
Finally, I wish to quote Prof Charan Singh, RBI Chair Professor, III-B. He says: "So long as there is money, the greed to obtain it in whichever way possible cannot be rid from the system. What government and banks can do is to install systems that minimize such frauds. We need an overhauling from period transfers of all employees in banks to making top management and directors liable.
A complete cleansing the system is needed". Prof Singh also points out: "Big frauds aren't so easy to commit and often occur because bank officials collude with borrowers, and sometimes with officials of third parties such as advocates or chartered accountants".
Over to Prime Minister Modi and Finance Minister Arun Jaitely. Will they take up the challenge of reforming the financial sector in totality without indulging in selective witch-hunting on political considerations ? It is equally advisable not to politically misuse the CBI and the Enforcement Directorate as this will further damage the credibility of the two agencies.



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The Prime Minister's reassuring words were heard at the YES Bank – Economic Times Global Business Summit in New Delhi on February 23 against the backdrop of the Rs 11,400 crore Nirav Modi scam involving one of the country's top public sector banks, Punjab National Bank, and the arrest of Kanpur businessman Vikram Kothari for loan defaults of over 3,500 crore. Should we take the Prime Minister's promise of action this time seriously? I keep my fingers crossed. According to reports, the number of bad loans to banks grew four-fold during the 2013-2017 period amounting to more than Rs 1 lakh crore as on September 30, 2017. This figure relates to people or companies characterized as "willful defaulters". That is, the defaulters who are unwilling to pay despite the borrowers' paying capacity. Here lies a catch The challenge of cleansing banking system ! The RBI data shows that 86 per cent of bank frauds for 2016-17 are linked to advances. It was 99 per cent in the PNB case. This points to collusion with insiders. These shady affairs are apparently part of the larger nexus phenomenon of power-wielders and business operators whose sole aim is to amass wealth at the cost of the public exchequer. More enterprising among the power-wielders and businessmen have managed to tuck away their pay-off booty in safe havens of foreign banks overseas. This is all part of ordure power management. Ironically, this business of money games is conducted under the portrait of Mahatma Gandhi amidst the high-sounding national creed of "Satyameva Jayate" inscribed below the Ashoka emblem ! Looking at the nature of this on-going "loot scenario", corruption today seems to be institutionalized. From sporadic cases of malpractices, graft and frauds have become part of the politicoadministrative- business-criminal nexus of public life. Pay off booty in safe havens ! No wonder, a large number of scams and scandals sit "at the apex of a mammoth pyramid of corruption". Black money, poll malpractices, bureaucratic obstacles, negative mindsets, petty bribery, tax evasion, manipulation in transfers and appointments – all form a part of this cesspool of corrupt practices. I still remember Prime Minister Modi's thundering words of "Na khayenge na khane denge" against the backdrop of scams and scandals of the Congress-led UPA establishment. He even promised to bring back massive scam money tucked in overseas foreign banks by scamsters and deposit Rs 15 lakh in every Indian's personal account. Like my fellow countrymen, I am still awaiting that magic deposit in my starving bank account as our honourable Prime Minister is completing four years of his high-profile job of the world's largest democracy! Prime Minister Modi is well-intentioned. His main problem, as I see it, is one of growing gap between what he promises and his action on the ground. Regrettably, he does not seem to realise that this is affecting his credibility despite his popularity graph still being high! His advantage today is the absence of a credible alternative on the national scene. Though Congress President Rahul Gandhi is shaping well, he has still a long way to go to take on Narendra Modi single-handedly. A lot depends on the unity of all non-BJP parties with a common minimum programme for the 2019 Lok Sabha elections. Be that as it may. Prime Minister Modi should have reasons to worry about the latest report from Berlin-based Transparency International. In its Corruption Perception Index-2017, India has fallen two notches. From being ranked 79th in 2016, India is now ranked 81 of 100 countries deemed as being the most corrupt. India ranking is worse than those of China and Bhutan but better than those of Pakistan and Bangladesh. The index ranks the countries by their perceived levels of public sector corruption according to experts and business people. It may be noted that this analysis was done before the multi-crore PNB fraud and the Rafala deal details became public. It is quite possible that India might drop further down in the rankings if these two scams were taken into account. The 2017 report, however, clearly states India is among the "worst offenders" in respect of graft and press freedom in the Asia-Pacific region. I expect Prime Minister Modi to take these observations of Transparency International seriously. The BJP could dismiss the Transparency International report as "flogging the dead horse of demonetization". But it is time the saffron party looked within and stopped following the footsteps of the Congress in power games. The Transparency International report says that improvement in performance can only be made if there is a strong political will for change and if a comprehensive strategy is adopted. Looking at Prime Minister Modi's track record of the past four years, he does not seem to have worked out a comprehensive strategy to root out corruption from the system, notwithstanding his brave words at public fora. The moot point is: where do we go from here? The main challenge before the nation is to break the vicious circle. This will require radical reforms at all levels of governance and shedding of secretive functional tendencies among bureaucrats, politicians and businessmen which enable them to thrive in the system to the disadvantage of millions of honest tax-payers. Only massive surgical operations can cleanse the system and keep the nation on healthy lines. We can set things right by restoring the functional autonomy of the institutions. Checks and balances in the system can be established by ensuring functional transparency and accountability by power-wielders in those areas wherein "power is exercised and to those who are directly affected by that power". Finally, I wish to quote Prof Charan Singh, RBI Chair Professor, III-B. He says: "So long as there is money, the greed to obtain it in whichever way possible cannot be rid from the system. What government and banks can do is to install systems that minimize such frauds. We need an overhauling from period transfers of all employees in banks to making top management and directors liable. A complete cleansing the system is needed". Prof Singh also points out: "Big frauds aren't so easy to commit and often occur because bank officials collude with borrowers, and sometimes with officials of third parties such as advocates or chartered accountants". Over to Prime Minister Modi and Finance Minister Arun Jaitely. Will they take up the challenge of reforming the financial sector in totality without indulging in selective witch-hunting on political considerations ? It is equally advisable not to politically misuse the CBI and the Enforcement Directorate as this will further damage the credibility of the two agencies.