CRACKDOWN

Source: The Hitavada      Date: 31 Mar 2018 10:37:48

WHILE the common people will be astounded and shocked at the frequency at which bank frauds are surfacing all over the country, there is a definite silver lining to this exposure. It is not that these frauds have taken place just in the last three-four years and or that Non-Performing Assets (NPAs) is only a recent phenomenon. Frauds and NPAs are firmly embedded in the system for years now but they remained wrapped in secrecy and away from public gaze. And hence there was general impression that the banking sector functioned in a clean, rule-based environment, unaffected by fraudulent functioning.

But the lid began to lift with possibly the Houdini act played on the banking system by liquor baron Vijay Mallya. Since then the Government at the Centre has made it its mission to get at these high profile masters of fraud. Ever since all enforcement agencies like the Income Tax Department, the Enforcement Directorate (ED), the Central Bureau of Investigation (CBI) and other intelligence agencies are in hot pursuit of the master cons.

Thus the attempt on the part of the Union Government is not to shield the high profile cons who have been using their connections at various levels to siphon off public money after defrauding the banking system in a brazen manner. The banking system was there to help businesses grow and help them as they took big investment decisions. After the economic reforms banks and other financial institutions had shown liberal approach to project financing and had been advancing money as required by the investors.

This was all done in good faith so as to help businesses grow and add to the prosperity of the country. While a majority of investors took advantage of the liberal support the banking system provided and took major investment decisions and made their projects grow, there have been crooks like Vijay Mallya, Nirav Modi, Mehul Choksi, Kothari and their ilk who had crooked designs. Instead of investing the money for development of their businesses they siphoned off the money borrowed from banks and other financial institutions to safe havens abroad through the money-laundering route. They did it for years. But the then Government just looked the other way while the schemers were milking the system, taking advantage of lax control, lack of due diligence, absence of checks and balances. Of course they were not alone in this plunder of the financial system. They were duly helped by those in the system itself, seating at the top of the management hierarchy and those occupying political power.

The coming to fore of several cases of banking frauds, tax evasion, growing NPAs, which has touched nearly Rs. two lakh crore, in recent months means the Government has mounted its vigil and has activated all the enforcement agencies to go after the wilful defaulters of public money, irrespective of their financial, political or social status. Thus the Government is very clear that however powerful the defaulter may be and whatever his clout, law is bound to catch up with him.

In fact it is a welcome development that cases of banking fraud are being brought to the surface and the culprits dealt with in proportion to the crime they have committed. The Government needs to be congratulated for launching this much-needed cleansing process. This will impart the necessary strength to the banking system and enable it resume its stellar role in the country’s economic growth, be a facilitator to the genuine investor, businessman. The weeding out process of course has to be carried out relentlessly because the rot has just begun to show up on the surface. The digging has to go much deeper to get at the root of the malaise.