In a world with few certainties, the only certainty for ordinary Indians is that they will be looted the whole nine yards. While you break your back trying to make a living, looting a bank is just a cinch for the daring and their servile accomplices in power. The PNB scam in which an NRI gems merchant swindled India's second biggest bank of Rs 11,300 crore is the latest example.
The ease with which the loot took place reeks of a banana republic where systems are in shambles. The prospect of adequate punishment to the guilty is far-fetched and fraught with useless legal rigmaroles. The bank insists the massive fraud is the creation of two corrupt geniuses -- no one else is involved. It takes an enormous deal of skullduggery to say so, given that the plunder has been going on for seven years. They are averse to a CBI probe (and they are all honourable men who can choose so) and there hasn't been a single arrest so far.
Of course no one goes to the gallows in India for a financial crime, however large that be, unlike in China. In China, incidentally, the ratio of bad loans to total bank assets is just about 1.5 percent, compared to the official 9.5 percent in India (this is zooming, soon to touch 14 percent). No one is advocating capital punishment here. But how about exemplary punishment for the worst financial crimes?
That won't happen until the common man realizes that he's a Matrix-style captive corpse which the system feeds on. And that the system is made up of your PNB bank officials, Nirav Modi, Vijay Mallya and the like. This system's engine is oiled by corrupt officials at regulatory bodies, various law enforcement agencies, the government and the judiciary. As the old joke goes, someone arrives at the bank for a loan on his bike and then, years later, arrives again in his Porsche to declare bankruptcy. In the meantime, the bank officials who facilitated the fraud have retired rich, the head honchos at the bank have eased into advisory roles in big companies or picked up positions in regulatory bodies that abet more fraud.
It's a pity that the man at the bottom heap never get to realize that he ends up paying more taxes to cover for the organized loot. That his tax money doesn't translate into better roads and toilets, better primary education and basic healthcare.
We are also a happy people who made more online searches for 'Nirav Modi wife' than for his whereabouts. Don't we want to get him, folks?
This is an age that has seen ultimate technological breakthroughs. Yet the Punjab National Bank took seven years to find out that basic internal mechanisms were flouted. You should be an ass to believe that. The bank knows the fraud is happening. The regulators know that the banks are dealing in shady practices. The government knows that the umpteen regulatory agencies are moving around like headless chicken. The justice system knows that there is no punitive system strong enough to instill fear and accountability. This sadistic kleptocracy at the top knows full well that they can keep screwing the hell out of ordinary people. And the media knows this too, but it's too carried away by the daily euphoria around markets, budget, mutual funds and those start-up wunderkind piffle.
A season to cry
There's no effective system to punish, and punish adequately, the perpetrators of financial crimes. This is a season when everybody cries foul over the rising NPAs. Those 9.5 lakh crore of bad loans the Indian banks have racked up. Those 2.11 lakh crore the government has committed to pump into the gaping holes through which public money has disappeared. This is what an RBI report says about the connection between these obnoxious NPAs and clear cases of fraud: "Almost all corporate loan-related fraud cases get seasoned for two to three years as NPAs before they are reported as fraud." ( from the Financial Stability Report in July 2017). Put in some basic syllogism and things are clear -- the emergence of the PNB fraud is an accident. It was destined to emerge later as a harmless NPA.
Our governments don't have qualms in shooting down tribal activists who paste posters on the walls of government offices. Of course, the shooting comes after giving them a fancy 'Maoist' label. For that matter, if India could send its financial criminals to jail for life the Maoist rebels will be out of job
It's a matter of utmost concern that India lacks a stringent code to pursue financial crimes mercilessly and award meaningful punishment to those found guilty. Surprisingly, we've moved ahead in other areas, like in the cyber sphere. We had cleverly created ruthless, draconian laws like Section 66A, 69A and 79 of the IT Act. Our governments don't have qualms in shooting down tribal activists who paste posters on the walls of government offices. Of course, the shooting comes after giving them a fancy 'Maoist' label. For that matter, if India could send its financial criminals to jail for life the Maoist rebels will be out of job.
Here are some recent news headlines: ED finds Vijay Mallya siphoned Rs 6,000 crore to shell companies; ED arrests director and promoter of a Mumbai-based firm in bank loan fraud involving Rs 2,600 crore; SFO finds top officials at SBI Capital Markets and Ambit guilty of fraud; Ex-Director of Andhra Bank arrested in Rs 5,000-crore bank fraud.
The necks that guillotines love
But how far these cases will go? Will the guilty be punished? Wil the punishment have a deterrence value? We have numerous agencies at the national level to track, unearth and investigate financial and economic offences --the Central Bureau of Investigation, Serious Fraud Investigation Office, Central Vigilance Commission, Central Economic Intelligence Bureau, the Directorate of Enforcement (DOE) and the Economic Intelligence Council (EIC). Yet we don't seem to be preventing serious offences from happening. We don't seem to be able to get to the perpetrators before they leave the country. We don't seem to even know about huge crimes until after seven years! We are a happy nation that has compromised with corruption at high places. We are also a happy people who made more online searches for 'Nirav Modi wife' than for his whereabouts. Don't we want to get him, folks?
Ironically, to make up for this, we make sure we send the little offenders to the gallows. Our financial guillotines are happy crunching away at the famished, enfeebled necks. Our great banks make sure each penny is accounted for, when it's the poor man's money. A pensioner gets Rs 3,300 as monthly pension, which is used every month. Obviously, the monthly minimum balance is not met. So, after a couple of months, when the pension amount is credited, the bank (State Bank of India) deducts Rs 3,050 in penalties. This was a story shared by a state finance minister on Facebook.
Hard luck if you are not the kleptocracy's favorite diamond designer.