The outgoing Chief economic advisor Shri Arvind Subramanian, in perhaps his last interview in an official capacity made a remark that political bosses have to face consequences. While he made this remark in the context of wrong decisions that maybe taken by ministers, we would want to imply it in a different context, though not an irrelevant one. It is well known that the unprecedented and unmanageable NPA crisis that India faces today has been because of a dubious teamwork of the Neta-Babu and banker. The large ticket fraudulent borrowers gained access to bank loans, under the initiative and shelter of the powerful Netas, and the corrupt bankers willingly toed the line to give giant loans to the most unworthy borrowers. In this criminal nexus, the Neta gained, the babu gained, the borrower gained, but the country lost. If the Neta had not given those illegal verbal instructions to the bankers, this story of a mega scam, would just not have started. Bad bank loans would then be confined to bonafide errors of judgement and not because of errors in integrity. The rot in integrity started from the top i.e. the Neta and his Babu. Thus while India is desperately struggling to resolve this gigantic crisis, which is holding back India’s growth and bankers are being hounded, the moot question is as to why are the corrupt politicians too not being punished for their misdeeds, of which they too were direct beneficiaries. The country has lost lacs of crores due to their malpractices and now growth opportunities too are being lost. It is imperative that the politicians who initiated the bad bank loans and gave shelter to the fraudulent borrowers too must be punished.
The scammy case of the Delhi based Era Infra Engineering Ltd., where a consortium of 19 banks have lost over Rs. 10000 crores, is a classic case here. It is reported by the DNA that even though the misdeeds of the borrower were known to the bankers much early in the day, for strange and inexplicable reasons, they took no timely action to recover their dues, at a time when they could have easily done so. There were categorical reports and incriminating evidence of bogus accounts, bogus sales, bogus receivables, bogus security and a clear siphoning of funds, yet the bankers took no action, neither to recover their dues and nor to lodge FIRs against the company promoters for criminal acts of cheating, fraud and forgery. What was the mysterious reason that all the banks, which included almost every government-owned bank, led by Union Bank of India, did not take any action against Era and its fraudulent directors? Sheer common sense says that no career banker would risk his life by shielding the fraudulent acts of a borrower but strangely, they all did. The mystery is as to who was the powerful person protecting the promoters of Era, under whose fear and orders, bankers blindly toed the line, risking their own selves. It obviously has to be a most powerful Neta and that Neta must be identified, investigated and punished.
A standard pattern of huge write-offs of bank loans is emerging in case after case, being settled under the NCLT. The write-offs of bank loans so far, have been shocking and huge viz. Adhunik Mettaliks 92%, Alok Industries 83%, Electrosteel 60% and Bhushan Steel 37%, resulting in losses of tens of thousands of crores, and an action against all those who gave such giant loans to the most undeserving borrowers is needed and in that list, the Netas should be the first to be punished/prosecuted.