Indian banks have been exposed to scams and loot in frequent iterations in recent years. Business establishments are now seeing an opportunity to loot banks and escape into thin air or park their funds abroad and shift their bases to tax havens. What is also known is that the political establishment that runs the country is sitting back and playing the fiddle or is shifting the blame on others. The latest episode is of the “biggest loot” of banks — by the ABG group of shipbuilders and repairers based in Surat. It took away loans of nearly Rs 23,000 crore from a consortium of 28 banks including SBI, ICICI etc and is claiming their business collapsed after the 2008 global financial meltdown.
The loans were sanctioned between years 2005 and 2010 without due diligence from the consortium of banks. This is exactly the reason for most of the bank frauds involving business sharks. Once the company’s going is “not good,” those who ran it acted in a frenzy to collect funds from as many banks as possible and mischievously diverted the cash to other entities like the ABG Singapore that they ran. Funds were diverted also to six tax havens. All fraud could not have happened without the quiet backing from responsible governments and banking agencies. The finance ministry was caught napping. Chances are that these men intentionally acted slow. The company’s accounts were marked NPAs (bad loans) in end-2013. A restructuring of the accounts followed in the next four months. In another two months’ time, the UPA went out of power and the NDA took charge of India’s governance. The restructuring failed and the account was declared NPA again in 2016. The SBI that got wind of what was going wrong could not file a complaint for years. It did so only in 2019. It made the matter public only a few days ago.
The finance ministers of the UPA and NDA governments, who should have taken quick remedial or preventive steps, are bound to go scot-free. As would the RBI brass. Nirmala Sitharaman says “determining the elements of a fraud” takes more than four years. India’s systems, even the judiciary, have not been of any help to check or rectify such situations. The name of the game is to drag matters on for years. When public sector banks suffer such huge losses, the nation’s wealth is being defrauded. The people who pay taxes through their noses are the ultimate losers. Archaic systems and rules would ensure that the guilty ultimately escapes retribution. India is today up for open loot.
