From Jimmy Nagarwala’s Rs 60 lakh from SBI to Nirav Modi’s Rs 11,000 crore-plus from PNB, India has a 47-year record of scams in govt banks. Why do all govts still love them?
After Lalit Modi and Vijay Mallya, Nirav Modi is the third industrialist to have left India in the wake of investigations into business irregularities.
Dice have been found dating to the Bronze Age in various Harappan sites in present-day northwest India and throughout Pakistan. And it’s very possible that some had female owners.
On 4 November 2025, NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Member Arun Baroka, noted that WhatsApp and Meta are distinct legal entities.
This world is being restructured and redrawn by one man, and what’s his power? It’s not his formidable military. It’s trade. With China, it turned on him.
Modi has a legacy. Only one, real legacy.Pogrom 2002.That is history.Whatever else he does including a denationalisation as Mr.Gupta suggests will be seen just as gimmicks only.The vengeance of history so terrible.
If nationalization of bank is a disaster let the Govt close all banks and start their own.
Today all H !b visa boys are the children of bank employees and BABUS KIDS GO TO Harvard or Cambridge or yale universities.
Rest of the students who studied Govt schools enjoy their India Hamara hai.
Bollywood guys find their schools anywhere.
Banking sector is the life line of any economy. No matter who runs the, how it runs affectively is the matter most. We have seen how both free economy and controlled economy failed 2008 crises in USA and Russian disintegration in 1990s. Fundamentals of banking is affective and prudent lending and recovery. Now we are facing the systemic failure. From branch level to top brass never bothered about their fundamental duties. It is because, self interest surpassed national interest. Greed and empathy ruled the rust. In such situation any check and balances will be an futile exercise. Judicial pronouncement takes years together. The remedy is long drawn. Inculcate nation first, rest next. Reform judiciary system by enacting special courts for specific specific purposes. Empower them to time bound pronouncements. Remove overlapping judiciary, once pronounced, only Supreme Court shall be appalant authority. Above all encourage moral and family culture to thrive in the society, so that it will take care of correcting the individual.
this Vedic astrology writer in article – “ Astrologically speaking , some highlights for India in coming year 2018” – published last year at theindiapost.com , simultaneously at wionews.com on 19 October , 2017. Just reproducing the text in the related prediction of the said article :-“ (1) Mid-March to 31 May 2018. ………….Chunk of industries may have tough time while looking for vitality. Those involved in decision making or governance of big enterprises or big organizations or think-tanks in the Govt , could be prone to errors or fault-lines or controversies giving rise to revision or amendment. … Some agreements with countries having economic or trading or commercial angle could pose issues causing concern and impeding economic growth”. Here , ‘giving rise to revision or amendment’ obviously means reform or necessary remedial measures.
When UPA was in power it had appointed a committee to suggest revamp of public sector banks (PSBs). Former CEO of UTI Bank Mr. P J Nayak was head of this committee, which submitted its report with its recommendations. But the Union Finance Ministry (UFM) then did not consider implementation of any of the recommendations. Subsequently when NDA came to power UFM decided to set-up a new authority called Bank Boards’ Bureau, which it was initially thought would act as a think tank and PSBs will be benefited by BBB. But this has not happened. 2. After PNB scam, everyone seems to be concerned about health of PSBs but no one is very clear as what needs to be done. Chief Economic Advisor has spoken about five R’s: recognition, resolution, recapitalisation, reform & regulation. 3. It is an open secret that there is UFM’s as also political interference in functioning of PSBs and unless Boards of PSBs are accorded autonomy albeit with accountability nothing much will change as regards PSBs.
Not a single Pusblic sector bank and PSU has made profit since its nationalization. The recent bank scams, air india mess, lousy managment at indian oil, SAIL should have woken the political establishment long time ago. If the government is indeed serious about tacking the scourge of corruption and inefficiency start first by divesting the PSU and privatizing the banks. Statism, large government and populism has done more harm to the poor and the middle class than the rich. If the nirav modi episode cannot shake up the administration go alone knows what will.
This is an idea of coming out of a sick Sanchi head. Instead of correcting the system blaming the PSUs is easy.You know how much asset they have particularly railways LIC GIC etc.The property in Mumbai itself run in to several lakh crores.Your friends in Mumbai vis a vis Ahmedabad love to own them when they have their slave Narendra Modi at the helm.
Well written Mr Gupta. PNB as an institution was once the pride of Punjab. Founded by Yodhraj Bhalla & some Punjabis’. My Grandfather a professor of Economics, M. R. Kohli’s first bank job, and then went on to establish in 1936, The New Bank of India, which was eventually Nationalized in 1980 as a profitable Bank. Thereafter, the Bank was run into the ground by bad management, and political pressures for loans which weren’t paid back. The NBI lasted only 14 years and in 1994, after it’s capital had been eroded by losses & had to be merged with PNB. The Government could have offered The New Bank of India to the private sector, and since it was not so big, a deal would have taken place. I as a Chartered Accountant, then 26, could have put a team & investors together and rebuilt the Bank, but it was not meant to be
Still support this Govt, as it has a lot of mess to deal with and Modi is genuine about fighting corruption, but very very disappointed by their privatization efforts, inspite of having a very good mandate.
PNB branch officials not following, Regional office not controlling, loans department not checking, credit not finding, forex department not finding, auditors not finding, RBI officials not finding this is a Question of Banking system –
50 plus shares owner Government to please wake up, check all controls and save the image of indian Public Banks
What a great suggestion! Keep the pressure alive sir till it is done. Govt has no business running banks, airlines, ordnance factories or any such economic activities. All of them are mostly useless and mediocre. Sell them all in a global tender. With the money generated thus, and unclogged focus, ensure gauranteed and quality education for all in the next 10 years. This will generate huge jobs as well.
Wow, Mr Gupta, such a great article. It must have taken some effort to select only those examples, which suit your argument and to ignore existence of other examples, which I might add, are almost equal in number which do not support it. Let’s look around the world and carry out an analysis of bank frauds internationally. I am sure you won’t be surprised to learn as you are aware of it already, that bank frauds do not have a particular propensity to take place in Government-owned banks. Which then brings us to your poster boys, Indian Private Sector Bank. Let’s take any bank fraud since 1990 and we would find that in all of them your poster boys seem to have taken part in one way or another. And, there is at least one kind of frauds, wherein the Government-owned banks can’t even aspire to compete with them. Yeah, Money Laundering. Even in this latest big fraud, some of your poster boys stand to loose public money. As investigations would later reveal, their systems aren’t particularly stronger than those of Government-owned banks. Their frauds do not make news simply because it is considered kind of “normal” for them. Remember 2008? One of your poster boys was the only bank, which saw a run on their ATMs. People of this country consider it “normal” for your poster boys to fail, to be bailed out by the Government and then to continue doing things much the same way as before. So, Mr Gupta, you have arrived at some extremely damning inferences in your article and the seriousness of your arguments are not commensurate with the magnanimity of the inferences. But then, frivolity is the order of the day and you have as much right to a livelihood as anyone. So, keep writing. I wish you well.
In Surat, a top diamond merchant, for the last six months, has not been paying any interest on the Rs 4,000 crore plus loan he has taken from a private bank. The bankers are keeping their fingers crossed, while pleading with him not to shut shop. He is the same man who, a few years ago, gifted cars to all his employees.
Fallout of Nirav Modi saga: Privatization mercenaries are coming out of woodwok like termite.
Did you know the cost of bailing out Fannie Mae & Freddie Mac, two of the largest mortgage providers in US to the tax payers: USD 5 TRILLION or 10% of annual global GDP?
Did you know that Lehman Brothers, Merrill Lynch, AIG, HBOS, Bradford and Bingley, etc etc etc were private enterprises?
Did you know that Bradley and Bingley was nationalised by British government at a cost of £50 billion to the british taxpayers?
Did you know that Government of Iceland nationalized one of the island’s three banks?
The list is endless!
And are you an expert on public policy or are you giving this free advise without any study or expertise just because you are ideologically aligned to the big businesses?
Never waste a crisis: like Milton Friedman sponsored genocide by Augusto Pinochet?
Let me give you a piece of my wisdom: जब कुछ आता ना हो तो अपना मुँह बन्द रखो!
Soon after the the most unexpected event of Bank Nationalisation, I wrote a 30_page write up on the subject in my Political Science Paper in M.A. (PHIL) ,Madras University 1970 Batch, foreseeing how the very banks would eventually become bankrupt thanks to unethical politicians, careless bureaucracy, uneducated polity at large and the like. Those were the days when an account holder in the erstwhile private banks with just Rupees Five minimum balance could walk in with pride and go out with self esteem. What a pity, what a pity, you know how you are treated now. I saw recently a PSU Bank pushing out through the tiny cage bundle after bundle currency responding to a customer’s withdrawal request. Does not the customer deserve a better treatment for handing over such high value currency in return for what that Bank earned on it all along ? Surely, I tell you , my friends, even the present Modi Government will make PSU BANKS still worse for the simple reason the next General Elections are round the corner now. After all, every People get the Government they deserve.
CHANDRASEKARAN
Formerly, Faculty, NAAA, Simla, H.P.
Among the top 20 banks, according to GNPAs in absolute terms, 18 are PSBs and only two are private sector banks — ICICI Bank and Axis Bank. These two private sector banks have a combined share of 7.9 per cent in total NPAs.
Sir, what a great article and what a great analysis. The IAS babus with basic education in something like grammar of Avadhi are made chairmen and MDs of the PSU banks. The MBAs and economists work under their whims without any say in any process. I was amazed yesterday, when the finance secretary Mr. Takru responded to what Mr. Dinesh Dubey said about his dissent note and resignation. Mr. Takru (mostly an IAS) said that he receives daily 10 mails of that nature!!!!! Are bhai, spam folder kholke bhaithate ho kya? A mail and phone from government appointed independent director is ignored by the two IAS officers. And today even they don’t feel shame in saying that they don’t even read mails from the directors appointed by themselves. There are 44 such directors and not everybody writes such mail daily. These babus, even if we choose to give them entire benefit of doubt on fraud side, are criminally negligent.
Look at PNB financial. Consistent operational losses for 6-7 years at a stretch, forget bottom-line. All ratios in bad shape. What the management is doing?
Does it even know banking? How the hell it doesn’t reconcile accounts worth 100s of crores for 7-8 years! What does your government job is safe mean if stretched to maximum? You can do anything?
And you rightly pointed out that any lending restrictions by government are compensated from the budget.
Very good regulatory framework, private ownership and mandatory compliance of public service obligation is in the best interest of the country.
Shekharji can only say such things ,since he is funded by the corporate czars of this nation.
He conveniently forgets the case of many big banks like global trust bank , nedungadi bank which went bust were not nationalised banks.
To use another much-spoken wisdom: what is worse than taking a wrong decision is taking the right decision at the wrong time.
Wrong timing tarnishes the decision itself.
I agree with the sentiment in your article, but any pragmatic leader (which Modi is) won’t take that risk at right now. The best time to take such anti-populist steps is in the first three years of power. Modi has already done that w/ demonetisation and GST.
Imagine if he goes for Bank Privatisation now. Everybody ranging from bank unions to labour unions to PSU unions would be up in arms against the move. ALL political parties (including allies) would be opposed to this and so will be many entrenched bureaucrats. Even some people within BJP would be opposed tot this. The probability of BJP losing elections next year would increase dramatically.
Will the country benefit from it? Given the scale of the exercise, it’ll surely take more than a year to get this through, and with Model Code of Conduct coming into effect in a few months, probably even longer. The new govt which shall come to power will surely abandon it, thus giving us nothing in return. And no govt worth its salt will take such a decision ever (unless of course a 1991 like crisis comes up)
Must undo but after giving amount to bank for NPA in agri Pmmy other weaker sanction loan to nationalized banks. What they given after nationalization to society
Who would set free a docile, tethered milch cow … Name one politically useful section of society that these PSBs cannot be forced to lend to, in defiance of due diligence and commercial prudence. Farm credit is now eleven trillion. Priority sector lending covers a lot of other grateful beneficiaries. NPAs approaching ten trillion are the fruit of many phone calls from Delhi, especially in the infrastructure sector. Everyone invited to the party has had a good time, at the expense of tax payers. An even higher price has been paid by the wider economy, in terms of opportunity cost, of lost growth, employment, taxes. No successor of Mrs Gandhi can deny her political savvy on this decision.
I cant disagree with it any more. In India, a large no of people invest or deposit in bank just because the GOI is the guarantor in PSU banks. Just have a reality check, how many poor or unprivileged have accounts in pvt banks & how many have in national banks?
Denationalizing all PSU banks would make the economy far morr fraudulent.
Now a days, businessmen are running away with money of banks, in case of comple denationalization there would be total vulnerability that pvt banks would run away with peoples money in case they go bankrupt somehow.(albeit its also a fact that till date no incumbent pvt bank has done that, but denationalizing all banks would increase the chances by many fold)
Every thing is not rosy with private banks . There are number of banks which went bankrupt in 40s and 50s in India . One such bank being Das Bank of Calcutta if I remember correctly. Bank nationalisation was not only meant to finance the poor and the neglected sector but to give cover to people from such miss happenings . If we are in a sorry state of affairs in Banks, accusing finger is raised not to nature of ownership of bank but the way NPAs are born , brought up in uncivilized manner , fathered by UNSCRUPULOUS gang of politicians with high level connection . Remains there only be left agony of powerless workers .
Too simplistic. Neither feasible nor desirable. All said and done, people need banks and have more faith in Govt banks as they believe that the Govt would stand by them. Indira Gandhi did nothing to reach out to the poor even after nationalisation. She had no such intention. PM Modi has done everything via Jan Dhan to rope them into the banking system. Could private banks have done this? Human greed leads to frauds and its concealment. Better governance is the need. Imagine a pvt bank going bust and the owners running away? Moreover, India has just a handful of business houses who can own a bank. That would lead to more concentration of wealth and resources in fewer hands and the entire polity and intellectuals including Shekhar Gupta would rise against this in the Suit Boot style.
Yes, “throw out” the PSU banks. Bring private players into defense production. Get seduced by idle talk of HDFC, ICICI top brass. Privatise Air India. Hell why not – privatise foreign embassies. Because nobody runs business better than businessmen. Never mind if small savings in PSUs are callously thrown out to start with a clean slate. Flatten the world to build skyscrapers for those that don’t perish under the rubble. Throw it out because it has Indira stamp on it, and we are bored of the Family. Do everything – but Not regulate. Because ofcourse private banks have never erred with bad loans and are so squeaky clean that they are epitome of Swachh Bharat. Because we have no guts to ask big bankers to behave and follow rules. Because the greatest government ever to be elected – with a man who can’t stop talking about how to grow money – is too meek to ask PSU banks to get their act together. It’s a disgrace what This govt has reduced banks to. And you think Amit Shah who was an ordinary obese smalltime south Bombay trader who built his reputation by taking over all of Gujarat’s co-op banks and running them like his fiefdom, is going to loosen his hold on PSUs? Do you guys even know who you write about? Or do you live forever in decontextualised delusions? Destroy because you are too limp to discipline?! How does India end up with these clowns after Manmohan Singh & Raghuram Rajan? Sir, please think about whole India before you build sand castles in typhoons.
So is Modi. Just one more crooked politician walking in the Constitutional footsteps of Nehru and Gandhi. PNB: The root of the malaise lies in India’s “Reservations” “Extortion” “Non Accountability” fomenting Constitution and Judiciary.
The problem here is that the fundamentals principles given in General manager A. M. Walker’s “Book of Instructions” for Lajpat Rai’s Punjab National Bank have not been extended to new technologies but been countermanded and over ruled by RBI’s and Finance Ministry’s casual and ignorant instructions. In my career through Banking I found that “Organization and Methods” and “Systems” were usually sinecure departments for well connected lazy socialites like “History” Dept. Even audit is not followed through rigorously in any Bank.
Not that it matters much. As we have seen for last four years, Modi Sarkar has done nothing to end either grass root corruption or bring the big fish from Kalmadi and Sheila to Chidambaram via Sonia and Vadra to book. Fully engrossed in delusional Monkey Bath and pursuing Khangress policies including appeasement of Moslems and Dalits and pampering Neta-Babus
Yatha Raja Thatha Prajaha. It was only a matter of time for any PSU, Banks or otherwise, to follow in the footsteps of India’s Law Makers (Netas), Law Enforcers (Babu-Cops) and Law Upholders (Milards)
India has been hollowed out by India’s crypto Islamo-Dalit-Commie-Xian Neta-Babu-Cop-Milard-Presstitute Crony Kleptocracy for Seventy Years!
Keeping banks under state control has proven to be unwise because of crony capitalism and structural management issues. However, India’s high profile private banks ICICI and Axis have always been right up there in NPAs. So, NPAs are not just a result of government ownership.
throw the tub along with the baby. eloquent. Sir this country would have gone to dogs in 2008 during the global sub prime crisis but for the psu banking system. and measuring everything in terms of returns in a country with such vast inequities and where the state has to pitch in is a motivated approach. SBI is among the ten wealthiest entities in terms of asset value. npas are also a product of misplaced lending . cronies do use it. instead of addressing the issue and put checks and balances we always tend to approach issues from the narrow prims of our ideological stand. market and you know better. we are common people who do not understand most of your views because of poor levels. credit cannot be the exclusive preserve of only the elite and powerful.
Modi has a legacy. Only one, real legacy.Pogrom 2002.That is history.Whatever else he does including a denationalisation as Mr.Gupta suggests will be seen just as gimmicks only.The vengeance of history so terrible.
If nationalization of bank is a disaster let the Govt close all banks and start their own.
Today all H !b visa boys are the children of bank employees and BABUS KIDS GO TO Harvard or Cambridge or yale universities.
Rest of the students who studied Govt schools enjoy their India Hamara hai.
Bollywood guys find their schools anywhere.
Banking sector is the life line of any economy. No matter who runs the, how it runs affectively is the matter most. We have seen how both free economy and controlled economy failed 2008 crises in USA and Russian disintegration in 1990s. Fundamentals of banking is affective and prudent lending and recovery. Now we are facing the systemic failure. From branch level to top brass never bothered about their fundamental duties. It is because, self interest surpassed national interest. Greed and empathy ruled the rust. In such situation any check and balances will be an futile exercise. Judicial pronouncement takes years together. The remedy is long drawn. Inculcate nation first, rest next. Reform judiciary system by enacting special courts for specific specific purposes. Empower them to time bound pronouncements. Remove overlapping judiciary, once pronounced, only Supreme Court shall be appalant authority. Above all encourage moral and family culture to thrive in the society, so that it will take care of correcting the individual.
this Vedic astrology writer in article – “ Astrologically speaking , some highlights for India in coming year 2018” – published last year at theindiapost.com , simultaneously at wionews.com on 19 October , 2017. Just reproducing the text in the related prediction of the said article :-“ (1) Mid-March to 31 May 2018. ………….Chunk of industries may have tough time while looking for vitality. Those involved in decision making or governance of big enterprises or big organizations or think-tanks in the Govt , could be prone to errors or fault-lines or controversies giving rise to revision or amendment. … Some agreements with countries having economic or trading or commercial angle could pose issues causing concern and impeding economic growth”. Here , ‘giving rise to revision or amendment’ obviously means reform or necessary remedial measures.
When UPA was in power it had appointed a committee to suggest revamp of public sector banks (PSBs). Former CEO of UTI Bank Mr. P J Nayak was head of this committee, which submitted its report with its recommendations. But the Union Finance Ministry (UFM) then did not consider implementation of any of the recommendations. Subsequently when NDA came to power UFM decided to set-up a new authority called Bank Boards’ Bureau, which it was initially thought would act as a think tank and PSBs will be benefited by BBB. But this has not happened. 2. After PNB scam, everyone seems to be concerned about health of PSBs but no one is very clear as what needs to be done. Chief Economic Advisor has spoken about five R’s: recognition, resolution, recapitalisation, reform & regulation. 3. It is an open secret that there is UFM’s as also political interference in functioning of PSBs and unless Boards of PSBs are accorded autonomy albeit with accountability nothing much will change as regards PSBs.
Not a single Pusblic sector bank and PSU has made profit since its nationalization. The recent bank scams, air india mess, lousy managment at indian oil, SAIL should have woken the political establishment long time ago. If the government is indeed serious about tacking the scourge of corruption and inefficiency start first by divesting the PSU and privatizing the banks. Statism, large government and populism has done more harm to the poor and the middle class than the rich. If the nirav modi episode cannot shake up the administration go alone knows what will.
This is an idea of coming out of a sick Sanchi head. Instead of correcting the system blaming the PSUs is easy.You know how much asset they have particularly railways LIC GIC etc.The property in Mumbai itself run in to several lakh crores.Your friends in Mumbai vis a vis Ahmedabad love to own them when they have their slave Narendra Modi at the helm.
Shekhar Gupta is a foreign agent. He wants the Americans to take over Indian banking. They already own 70% of private banks.
Well written Mr Gupta. PNB as an institution was once the pride of Punjab. Founded by Yodhraj Bhalla & some Punjabis’. My Grandfather a professor of Economics, M. R. Kohli’s first bank job, and then went on to establish in 1936, The New Bank of India, which was eventually Nationalized in 1980 as a profitable Bank. Thereafter, the Bank was run into the ground by bad management, and political pressures for loans which weren’t paid back. The NBI lasted only 14 years and in 1994, after it’s capital had been eroded by losses & had to be merged with PNB. The Government could have offered The New Bank of India to the private sector, and since it was not so big, a deal would have taken place. I as a Chartered Accountant, then 26, could have put a team & investors together and rebuilt the Bank, but it was not meant to be
Still support this Govt, as it has a lot of mess to deal with and Modi is genuine about fighting corruption, but very very disappointed by their privatization efforts, inspite of having a very good mandate.
Do columnist really think Private Banks doesn’t have a problem of NPAs.
He really doesn’t know how these private banks cook up the books to show positive numbers…
PNB branch officials not following, Regional office not controlling, loans department not checking, credit not finding, forex department not finding, auditors not finding, RBI officials not finding this is a Question of Banking system –
50 plus shares owner Government to please wake up, check all controls and save the image of indian Public Banks
I pity the columnist comparing the market capitalization etc.
There should not be any comparison of nationalized Banks to private Banks. Don’t compare apples with oranges.
Columnist should do 360 degree review before jumping to conclusion.
What a great suggestion! Keep the pressure alive sir till it is done. Govt has no business running banks, airlines, ordnance factories or any such economic activities. All of them are mostly useless and mediocre. Sell them all in a global tender. With the money generated thus, and unclogged focus, ensure gauranteed and quality education for all in the next 10 years. This will generate huge jobs as well.
Wow, Mr Gupta, such a great article. It must have taken some effort to select only those examples, which suit your argument and to ignore existence of other examples, which I might add, are almost equal in number which do not support it. Let’s look around the world and carry out an analysis of bank frauds internationally. I am sure you won’t be surprised to learn as you are aware of it already, that bank frauds do not have a particular propensity to take place in Government-owned banks. Which then brings us to your poster boys, Indian Private Sector Bank. Let’s take any bank fraud since 1990 and we would find that in all of them your poster boys seem to have taken part in one way or another. And, there is at least one kind of frauds, wherein the Government-owned banks can’t even aspire to compete with them. Yeah, Money Laundering. Even in this latest big fraud, some of your poster boys stand to loose public money. As investigations would later reveal, their systems aren’t particularly stronger than those of Government-owned banks. Their frauds do not make news simply because it is considered kind of “normal” for them. Remember 2008? One of your poster boys was the only bank, which saw a run on their ATMs. People of this country consider it “normal” for your poster boys to fail, to be bailed out by the Government and then to continue doing things much the same way as before. So, Mr Gupta, you have arrived at some extremely damning inferences in your article and the seriousness of your arguments are not commensurate with the magnanimity of the inferences. But then, frivolity is the order of the day and you have as much right to a livelihood as anyone. So, keep writing. I wish you well.
In Surat, a top diamond merchant, for the last six months, has not been paying any interest on the Rs 4,000 crore plus loan he has taken from a private bank. The bankers are keeping their fingers crossed, while pleading with him not to shut shop. He is the same man who, a few years ago, gifted cars to all his employees.
Fallout of Nirav Modi saga: Privatization mercenaries are coming out of woodwok like termite.
Did you know the cost of bailing out Fannie Mae & Freddie Mac, two of the largest mortgage providers in US to the tax payers: USD 5 TRILLION or 10% of annual global GDP?
Did you know that Lehman Brothers, Merrill Lynch, AIG, HBOS, Bradford and Bingley, etc etc etc were private enterprises?
Did you know that Bradley and Bingley was nationalised by British government at a cost of £50 billion to the british taxpayers?
Did you know that Government of Iceland nationalized one of the island’s three banks?
The list is endless!
And are you an expert on public policy or are you giving this free advise without any study or expertise just because you are ideologically aligned to the big businesses?
Never waste a crisis: like Milton Friedman sponsored genocide by Augusto Pinochet?
Let me give you a piece of my wisdom: जब कुछ आता ना हो तो अपना मुँह बन्द रखो!
Soon after the the most unexpected event of Bank Nationalisation, I wrote a 30_page write up on the subject in my Political Science Paper in M.A. (PHIL) ,Madras University 1970 Batch, foreseeing how the very banks would eventually become bankrupt thanks to unethical politicians, careless bureaucracy, uneducated polity at large and the like. Those were the days when an account holder in the erstwhile private banks with just Rupees Five minimum balance could walk in with pride and go out with self esteem. What a pity, what a pity, you know how you are treated now. I saw recently a PSU Bank pushing out through the tiny cage bundle after bundle currency responding to a customer’s withdrawal request. Does not the customer deserve a better treatment for handing over such high value currency in return for what that Bank earned on it all along ? Surely, I tell you , my friends, even the present Modi Government will make PSU BANKS still worse for the simple reason the next General Elections are round the corner now. After all, every People get the Government they deserve.
CHANDRASEKARAN
Formerly, Faculty, NAAA, Simla, H.P.
“Uday Kotak, who controls Kotak Bank, is among distinguished investors in ThePrint. ”
And why do we need to know that in the context of this article ?
Among the top 20 banks, according to GNPAs in absolute terms, 18 are PSBs and only two are private sector banks — ICICI Bank and Axis Bank. These two private sector banks have a combined share of 7.9 per cent in total NPAs.
Sir, what a great article and what a great analysis. The IAS babus with basic education in something like grammar of Avadhi are made chairmen and MDs of the PSU banks. The MBAs and economists work under their whims without any say in any process. I was amazed yesterday, when the finance secretary Mr. Takru responded to what Mr. Dinesh Dubey said about his dissent note and resignation. Mr. Takru (mostly an IAS) said that he receives daily 10 mails of that nature!!!!! Are bhai, spam folder kholke bhaithate ho kya? A mail and phone from government appointed independent director is ignored by the two IAS officers. And today even they don’t feel shame in saying that they don’t even read mails from the directors appointed by themselves. There are 44 such directors and not everybody writes such mail daily. These babus, even if we choose to give them entire benefit of doubt on fraud side, are criminally negligent.
Look at PNB financial. Consistent operational losses for 6-7 years at a stretch, forget bottom-line. All ratios in bad shape. What the management is doing?
Does it even know banking? How the hell it doesn’t reconcile accounts worth 100s of crores for 7-8 years! What does your government job is safe mean if stretched to maximum? You can do anything?
And you rightly pointed out that any lending restrictions by government are compensated from the budget.
Very good regulatory framework, private ownership and mandatory compliance of public service obligation is in the best interest of the country.
Shekharji , do u think your article is appropriate or useful, insteat of making system leak proof, you are telling to privatise it.
Shekharji can only say such things ,since he is funded by the corporate czars of this nation.
He conveniently forgets the case of many big banks like global trust bank , nedungadi bank which went bust were not nationalised banks.
Brilliant, as always. I hope Modi and Jaitley pay heed to it!
To use another much-spoken wisdom: what is worse than taking a wrong decision is taking the right decision at the wrong time.
Wrong timing tarnishes the decision itself.
I agree with the sentiment in your article, but any pragmatic leader (which Modi is) won’t take that risk at right now. The best time to take such anti-populist steps is in the first three years of power. Modi has already done that w/ demonetisation and GST.
Imagine if he goes for Bank Privatisation now. Everybody ranging from bank unions to labour unions to PSU unions would be up in arms against the move. ALL political parties (including allies) would be opposed to this and so will be many entrenched bureaucrats. Even some people within BJP would be opposed tot this. The probability of BJP losing elections next year would increase dramatically.
Will the country benefit from it? Given the scale of the exercise, it’ll surely take more than a year to get this through, and with Model Code of Conduct coming into effect in a few months, probably even longer. The new govt which shall come to power will surely abandon it, thus giving us nothing in return. And no govt worth its salt will take such a decision ever (unless of course a 1991 like crisis comes up)
Must undo but after giving amount to bank for NPA in agri Pmmy other weaker sanction loan to nationalized banks. What they given after nationalization to society
Who would set free a docile, tethered milch cow … Name one politically useful section of society that these PSBs cannot be forced to lend to, in defiance of due diligence and commercial prudence. Farm credit is now eleven trillion. Priority sector lending covers a lot of other grateful beneficiaries. NPAs approaching ten trillion are the fruit of many phone calls from Delhi, especially in the infrastructure sector. Everyone invited to the party has had a good time, at the expense of tax payers. An even higher price has been paid by the wider economy, in terms of opportunity cost, of lost growth, employment, taxes. No successor of Mrs Gandhi can deny her political savvy on this decision.
I cant disagree with it any more. In India, a large no of people invest or deposit in bank just because the GOI is the guarantor in PSU banks. Just have a reality check, how many poor or unprivileged have accounts in pvt banks & how many have in national banks?
Denationalizing all PSU banks would make the economy far morr fraudulent.
Now a days, businessmen are running away with money of banks, in case of comple denationalization there would be total vulnerability that pvt banks would run away with peoples money in case they go bankrupt somehow.(albeit its also a fact that till date no incumbent pvt bank has done that, but denationalizing all banks would increase the chances by many fold)
Every thing is not rosy with private banks . There are number of banks which went bankrupt in 40s and 50s in India . One such bank being Das Bank of Calcutta if I remember correctly. Bank nationalisation was not only meant to finance the poor and the neglected sector but to give cover to people from such miss happenings . If we are in a sorry state of affairs in Banks, accusing finger is raised not to nature of ownership of bank but the way NPAs are born , brought up in uncivilized manner , fathered by UNSCRUPULOUS gang of politicians with high level connection . Remains there only be left agony of powerless workers .
Too simplistic. Neither feasible nor desirable. All said and done, people need banks and have more faith in Govt banks as they believe that the Govt would stand by them. Indira Gandhi did nothing to reach out to the poor even after nationalisation. She had no such intention. PM Modi has done everything via Jan Dhan to rope them into the banking system. Could private banks have done this? Human greed leads to frauds and its concealment. Better governance is the need. Imagine a pvt bank going bust and the owners running away? Moreover, India has just a handful of business houses who can own a bank. That would lead to more concentration of wealth and resources in fewer hands and the entire polity and intellectuals including Shekhar Gupta would rise against this in the Suit Boot style.
A perfect response, Sir.
Yes, “throw out” the PSU banks. Bring private players into defense production. Get seduced by idle talk of HDFC, ICICI top brass. Privatise Air India. Hell why not – privatise foreign embassies. Because nobody runs business better than businessmen. Never mind if small savings in PSUs are callously thrown out to start with a clean slate. Flatten the world to build skyscrapers for those that don’t perish under the rubble. Throw it out because it has Indira stamp on it, and we are bored of the Family. Do everything – but Not regulate. Because ofcourse private banks have never erred with bad loans and are so squeaky clean that they are epitome of Swachh Bharat. Because we have no guts to ask big bankers to behave and follow rules. Because the greatest government ever to be elected – with a man who can’t stop talking about how to grow money – is too meek to ask PSU banks to get their act together. It’s a disgrace what This govt has reduced banks to. And you think Amit Shah who was an ordinary obese smalltime south Bombay trader who built his reputation by taking over all of Gujarat’s co-op banks and running them like his fiefdom, is going to loosen his hold on PSUs? Do you guys even know who you write about? Or do you live forever in decontextualised delusions? Destroy because you are too limp to discipline?! How does India end up with these clowns after Manmohan Singh & Raghuram Rajan? Sir, please think about whole India before you build sand castles in typhoons.
PNB is just the tip of the ice berg.
So is Modi. Just one more crooked politician walking in the Constitutional footsteps of Nehru and Gandhi. PNB: The root of the malaise lies in India’s “Reservations” “Extortion” “Non Accountability” fomenting Constitution and Judiciary.
The problem here is that the fundamentals principles given in General manager A. M. Walker’s “Book of Instructions” for Lajpat Rai’s Punjab National Bank have not been extended to new technologies but been countermanded and over ruled by RBI’s and Finance Ministry’s casual and ignorant instructions. In my career through Banking I found that “Organization and Methods” and “Systems” were usually sinecure departments for well connected lazy socialites like “History” Dept. Even audit is not followed through rigorously in any Bank.
Not that it matters much. As we have seen for last four years, Modi Sarkar has done nothing to end either grass root corruption or bring the big fish from Kalmadi and Sheila to Chidambaram via Sonia and Vadra to book. Fully engrossed in delusional Monkey Bath and pursuing Khangress policies including appeasement of Moslems and Dalits and pampering Neta-Babus
Yatha Raja Thatha Prajaha. It was only a matter of time for any PSU, Banks or otherwise, to follow in the footsteps of India’s Law Makers (Netas), Law Enforcers (Babu-Cops) and Law Upholders (Milards)
India has been hollowed out by India’s crypto Islamo-Dalit-Commie-Xian Neta-Babu-Cop-Milard-Presstitute Crony Kleptocracy for Seventy Years!
Keeping banks under state control has proven to be unwise because of crony capitalism and structural management issues. However, India’s high profile private banks ICICI and Axis have always been right up there in NPAs. So, NPAs are not just a result of government ownership.
throw the tub along with the baby. eloquent. Sir this country would have gone to dogs in 2008 during the global sub prime crisis but for the psu banking system. and measuring everything in terms of returns in a country with such vast inequities and where the state has to pitch in is a motivated approach. SBI is among the ten wealthiest entities in terms of asset value. npas are also a product of misplaced lending . cronies do use it. instead of addressing the issue and put checks and balances we always tend to approach issues from the narrow prims of our ideological stand. market and you know better. we are common people who do not understand most of your views because of poor levels. credit cannot be the exclusive preserve of only the elite and powerful.