recover money

Source: The Hitavada      Date: 21 Feb 2018 11:23:20

Nakshatra Ashwini 13H 58M
Moon Mesha (Rajandekar Panchang)
Paksha Falgun Shukla Tithi Shashthi 27H 47M
Muslim Jamadilakhar 4th Hijree 1439


EVEN as the country and public sector banks (PSBs) were overcoming the early tremors of the mega scam in Punjab National Bank involving billionaire Nirav Modi and Mehul Choksi the public confidence has yet again been rattled by the alleged swindling of over Rs 3,500 crore of loan funds by Rotomac Global Pvt Limited. The company owned by Vikram Kothari got loans from a consortium of banks on the pretext of importing various material but the money was used in other ventures with repeated defaults on payments. It has once again raised a huge question over working of public sector banks and their vulnerability.

Kanpur-based Kothari, his wife and son have been booked by the CBI but questions remain over recovery of the massive amount that went out from public purse through banks. A standard procedure followed by the investigating agencies and Government is detaining the accused and seizing their assets in various parts of the country. In the Nirav Modi case, too, the Government went the standard way, raiding and seizing assets and properties owned by Modi and his uncle Choksi. As per Enforcement Directorate estimate, the value of Modi’s seized assets is Rs 5,716 crore. Raids will continue for a long time with more skeletons tumbling out during interrogation of the PNB officials allegedly involved in the money laundering scam.

The question is of public faith in banks that has shaken to the core. The overdrive of creativity on social media about PNB fraud apart, there is massive rage among the common bank customers who have to undergo a maze of processes to avail a meagre amount as loan, mostly for domestic purposes. Such scams further dent the banks’ image as secured homes of people’s hard-earned money deposited through various instruments of banking. The PNB fraud is a big blot on public sector banks which were supposed to get their balance-sheets right after a generous pumping of funds by the Central Government. The moot question now is how are the banks going to recover the amount from the Modis, Choksis and Kotharis.

The worth of assets seized from raids on Nirav Modi’s establishment is not even one-fourth of the overall amount laundered through the Letters of Understanding (LoU). While the Government has initiated steps for extradition of Nirav Modi and others from foreign lands, it looks a distant dream. For, extradition is a cumbersome and time consuming process. The problem India is facing in bringing back Vijay Mallya and Lalit Modi is a case in point. In the past also, many on the most-wanted list were not allowed to be extradited citing poor conditions in Indian jails which goes contrary to their human rights.

The most prudent way for the Government is freezing and recovering all the overseas assets of the accused. Nirav Modi has businesses spreading over various countries. Recovery of the default amount should be of paramount importance for the Government and the banks. A legal recourse can be taken to freeze Nirav Modi’s overseas assets which will cause him a big pinch. Squeezing the scamsters is imperative for getting back public money. There are enough legal resources available in foreign countries that grant freezing of assets accrued from fraudulent transactions. Many countries opt for this recourse to bring the perpetrators to their knees.
The Government has already established a well-laid process of solvency and liquidation to recover money from defaulters. It should be invoked in the PNB fraud case to realise the amount from the accused. After all, faith of public is at stake and an assuring action to recover the amount instead of seizing assets would definitely act as a balm for public sector banks.