Letters to the Editor

Bank scam

OF late, public sector banks (PSBs) have been dogged by the burden of non-performing assets (NPAs) and scams (Cover Story, March 16).The scam that has come to light in Punjab National Bank happened because of a systemic failure, both at PNB and the regulator, the Reserve Bank of India. The RBI’s energies were focussed on demonetisation and then remonetisation. The Nirav Modi scam has shaken people’s faith in PSBs.

The government is planning to bring a law to use depositors’ funds to bail in PSBs. Is any depositor responsible for a scam of this magnitude? The scam has also demolished the logic that black money is hoarded in the form of bundles of notes; one of the stated reasons for demonetisation was to flush it out. In the end, white money has become black and vanished into thin air. Some people see the scam as an opportunity to push for the privatisation of PSBs. The irony is that wilful defaulters are from the private sector.

Is the global economy prepared to face the next economic crisis, which can be triggered by two factors: China’s corporate debt and the ever-increasing NPAs of India’s PSBs?

Deendayal M. Lulla, Mumbai

Ordinary citizens find it hard to get even a simple loans. However, banks bend over backwards to offer the high and mighty loans and letters of undertaking without sureties or guarantees. The officials of PNB are responsible for this fraud. The bank’s CEO is morally responsible and should have resigned. The RBI has failed in its duty to oversee the large-scale transactions.

One wonders what the Finance Ministry has been doing in the four years since the National Democratic Alliance (NDA) came to power. When the BJP was in the opposition, it lost no opportunity to hold the United Progressive Alliance (UPA) government responsible for its lapses. Now it is trying to defend the indefensible. That is politics at its worst. One hopes that the banking system is strengthened to prevent such frauds in the future.

D.B.N. Murthy, Bengaluru

THE scam has shaken the credibility of the Indian banking system. It is shocking that officials at PNB ignored the alarm bells rung by Santosh Srivastava, a former managing director of Gitanjali Gems, one of Mehul Choksi’s companies. He said he had noticed irregularities in the functioning of the company during his tenure. After leaving the company in 2013, he joined hands with others and wrote about the fraudulent practices to the Securities and Exchange Board of India, the Economic Offences Wing, the Serious Fraud Investigation Office, the Enforcement Directorate and the Prime Minister’s Office. Of these, only the PMO responded and forwarded his letters to the Registrar of Companies. But no action was taken. This shows that there is a criminal nexus between PNB officials and bureaucrats in various government agencies. This must be investigated.

Kangayam R. Narasimhan, Chennai

THE fraud has raised serious questions about the honesty, efficiency and credibility of officials of PNB. Then there is the bank fraud case relating to Vikram Kothari of Rotomac Pens. One fails to understand why banks are plagued by frauds and corruption.

As usual, after the scam became public, the blame game started between the BJP and the Congress. Two Ministers of the NDA government claimed that the scam had begun during the Congress regime. This might be so, but the actual withdrawal worth about Rs.11,400 crore happened during the NDA regime. The Finance Minister put the blame on PNB and the RBI. The scam proves that there was a total failure of overall day-to-day supervision by the Finance Ministry, which the government must admit. The efficiency of the RBI has fallen sharply. Furthermore, the government has not yet been able to check the trend of mounting NPAs in banks.The RBI’s Financial Stability Report in 2017 stated that frauds were on the rise and this was related to the manner in which bad loan reporting was carried out. Will banks take the RBI’s observation seriously?

Jayant Mukherjee, Kolkata

K.P. Ramanunni

ONE must appreciate the courage and sagacity of the Malayalam writer K.P. Ramanunni (“The world of letters can’t be dominated by hate”, February 16). In his novel “God’s Own Book”, he has brought the Prophet Muhammad, Jesus Christ and Lord Krishna into a congenial narrative, thus defying India’s cultural climate of intolerance and bigotry. One hopes that similar efforts are made in other languages.

However, a little caution is required when one cites references or facts. Muslim poets such as Zafar Khan wrote poems about the Goddess Ganga, but there have been dozens of Muslim writers who have written about Hindu Gods and festivals. Amir Khusrow, Dakhini Quli Qutub Shah, Rahim, and so on are popular, even revered. But this very demand to prove one’s credentials of being a good Indian is flawed. Harmony can be achieved through moral, ethical or spiritual affinities. It is next to impossible to do this on theological or ritual grounds.

No new religion would ever have taken shape if the orthodoxy of the older ones had prevailed. There would be no Christianity, no Islam and none of the hundreds of branches in every known religion if Judaism had had the last word. I congratulate Ramanunni for his brave efforts to heal the wounds.

Suresh Salil, Sadaatpur, Delhi