CBI Accuses Top Ranked IDBI Officers

It is reported in newspaper that CBI has named 5 IDBI Bank executives in Rs 950 cr loan misuse case by Mallya. It is furhter said that there was a slew of meetings between Mallya and key bank executives as the Kingfisher Airlines was going under process of getting additional loan.

Yogesh Agarwal, the then chairman and managing director of IDBI Bank, and four other executives who were members of the credit committee, B K Batra, O V Bundellu, R Bansal and S K V Srinivasan, have been named by the CBI.

The report points out the loan was misused by Vijay Mallya and was diverted abroad on false claims. In this way CBI has cast aspersion on intgrity of bank officials and it is subjected to futher scanning snd scrutiny of important documents. Let us see whether CBI gets success in punishing all guilty officials or CBI surrenders under pressure of some more powerful persons in the system.

Here I would like to point out that formation of Credit Approval Committee or Executive Committee or Management Committee is done as Per advice of RBI and Government of India to take decisions on high value loan proposals .There use to be five to seven mmbers from key departments who are supposed to look into merits and demerits of the each high value loan proposal and then discuss, deliberate and decide unanimously that the promosed loan may be sanctioned or not sanctioned.

Credit committees are formed at every administrative offices of each bank and they decide jointly as per their delegated powers whether loan should be sanctioned or not to person or company seeking fresh loan or enhancement in credit facility.. This policy was introduced in banks after S K Jain episode in which it was alleged that the then Chief of the bank had received bribe for passing a high value loan.

But in practice, the officer who is super boss of such committees dictates and other members blindly sign on dotted line. None of members of such committee has courage to oppose the decision and likings or dislikings of a super boss who is also a part of such committees.

IF Executive Dirctor or CMD is head of the committee and if he wants a loan of Rs.1000 crore should be sanctiond to a comapnay 'X', processing officers in loan departments process and prepare the proposal incorpoarting all good points and ignoring all bad points of the proposal and submit it before crdit committee in which all members blindly sign. 

In this way, the basic purpose of formation of high power committee is defeated . If any officer of the committee hesitates or point out irregularities and deficiencies of the proposed loan application, he has to bear the brunt of top boss in some way or the other. Such officer may be posted in critical place, or rejected in promotion or given an assignment which does not suit the mind of the person. It is therefore always easy for junior members to sail in the direction of the current.

In public sector bank, it is not important whether banks are safe or not, most important is whether boss is happy or not . None of junior officer want to disturb his or her family and none of them want to disturb his or her mental peace by putting questions before higher boss. This culture is root cause of all maladies which are now surfacing in public sector banks and which has contributed a lit in creation of bad loans in PSU banks.

In some cases, there may be some other reasons behind a default of bank loan . They may be natural calamities, failure of projects, malicious intention of borrower, cost inflation of project, inabilityof promoters, deficiency in technical support , non-viability of projct,higher interest rate, wrong poicy of the government , political intefrence, market comtition, diversion of fund etc. But there are several such cases where loan goes bad due to involvement of corruption in the deal.

If CBI or SIT or any powerful body make forensic audit of each bad accounts involving loan default of amount more than say five or ten crore rupees, it will become crystal clear that in three fourth of cases related to NPA, it was bad officials who caused loss to bank in nexus with ill-motivated borrowers. And most painful part of each such case is that such corrupt officers get patronage from powerful politicians and get quicker elevation and quicker promotion in their career . Such corrupt officers get cream posting and transfered in or transferrd out from a branch as per whims and suitability of promoters of the company seeking loan.

The Enforcement Directorate (ED) issued summons to the chief financial officer (CFO) of the defunct Kingfisher Airlines Ltd, A. Raghunathan, and a few officials of IDBI Bank Ltd as part of its probe into a money laundering case.

The ED had also registered a case under the Prevention of Money Laundering Act to trace the diversion of the Rs.950 crore loan granted to the airline by the bank.

If ED or CBI go deep into all high value cases of loan default , they will find corruption in majority of cases. In fact many more cases will surface if they make a forensic audit of even those high value loan accounts which are now in good loan category called as standard category. Many high value bad loans are concealed by clever bank officials to save themselves, their colleagues who retired and also to save borrowers from whom they have taken bribe and recevid illegal gratification.

Mr. Chidmabram as Finance Minister or as Home Minister in UPA government damaged PSU banks and has promoted a culture of flattery and bribery. Mr. Chidambram had forced many officials of many banks to lend money to business houses of his choice. He promoted loan mela culture and loan waiver culture in PSU banks to protect evil officials and evil borrowers of bank. He had promoted a culture of window dressing in PSU banks It is he who had appointed ED and CMD in banks as per his whims and fancies and caused a great loss to PSU banks. It is he who played foul game with good officers taking support of deaf and dumb the then PM Mr. Manmohan singh.

Clever politicians normally talk of credit growth and GDP to protect evil officials and then talk of economic recession to provide umbrella to looter borrowers and corrupt bankers. This reign of lie and exploitation of public fund by politicians as well as bankers has to be stopped and government has to learn to read between the lines and try to understand the true story of each bad debts .

Unpleasant story of Kingfisher is not a unique story related to Banks. In fact, Bankers in general are using process of evergreening or restructuring to keep their bad loan in standard category even if the loan should be in category of NPA as per RBI norms.They restructure a bad loan to hide Non-Performing Assets . This is their well established culture and not an isolated story related to Mallya Kingfisher. Because it helps in protecting corrupt bank officials, it saves corrupt politicians and it reduces the work of judiciary.

Only a few days ago ,CBI REGISTERED A CASE AGAINST THEN GENERAL MANAGER & FOUR OTHER OFFICIALS OF SYNDICATE BANK AND OTHERS INCLUDING A CHARTERED ACCOUNTANT & THREE PRIVATE PERSONS FOR CAUSING AN ALLEGED LOSS OF RS.1000 CRORE(APPROX) TO BANK.

AS a matter of fact management of each bank has acted carelessly and negligently . They served their bosses in a more loyal and devoted spirit. They in general never bothered of loss bank will have to incur due to their bad decisions. They think that if they do not abide by verbal orders of their bosses , their life will bcome miserable, their carer will be doomed and their image in society will become pathetic. Fear of torturous transfers and rejection in promotion process kills the real spirit of good officers and encourage bad officers in taking more and more evil decisions.

I have no doubt that Action Against Mallya, promoter Of Kingfisher will Shake the castles of all crorepati and Arabpati Defaulters of banks. This will send shocking and alerting message to all defaulters of banks who are though rich and capable to repay the dues but wilfully avoiding repayment of bank loan.

Clamping down on Mallya is just the beginning.More Kingfishers will fly out of the nest. There are hundreds of Kingfisher in the system. A day will come when Mr. Mallya will expose evil minded and corrupt top officials of banks and top ranked ministers of UPA and Congress Party led Government who granted loans not only to Kingfisher Mallya despite several irregularities, but also to several other corporate houses. Then only , real picture of bankers and politicians will emerge.

Let us see whether current government and CBI are able to detect all looters includinng bankers, borrowers, ministers and other VIPs associated with the process of lending dirctly and indirectly or keep thm confined to Mallya. If they act honestly, it will expose the hollowness of entire system . It will expose the evil culture created, irrigated and promoted by Congress Party led government. If they act honestly I think 90 percent of top officials who headed PSU banks and several senior offiicials who worked or who are working under them during last ten years will go to jail .

I am happy that at least current government is at least serious in matter of recovery of money from at least big borrowers. The intention of the governmnt is clear by the fact that they have chosen Mr. Vinod Rai (ex- CAG Chief) to head BBB . Another indicator of seriouness and honesty of current government is that DRT for the first time freezd Rs.513 crore of Kingfisher.

I salute Mr. Raghuram Rajan RBI Governor , Mr. Narendra Modi Prime Minister of India and Mr. Arun Jaitley who have taken bad loan hidden in PSU banks seriously and promised to recover every pie from defaulting companies. It is their joint efforts that the matter of recovery of bad loans is progressing slowly in right direction.

Even bank offficials of various banks who were enjoying top posts of banks and becoming wealthy through corrupt means and evil ways will now change their mindset and try to improve their quality of lending in future. If they are not taken to task , government will help in recovery of Rs.100 crore and these corrupt bankers will add further Rs.1000 crore in basket of bad debts.

Here It will be proper to mention that role of Chartered Accountant , auditors and inspector is more to be condemned . It is Chartered Accountant who prepare fake , fabricated and flase balance sheet for a company to suit the requiremnt of lending bank and to suit Income Tax authorities. It is they who play with facts and figures and prepare such a balance sheet which many times do not match with ground realities. It is they who certify accounts of banks and it is they who certify even bad loan (Non Performing Assets ) accounts as good accounts (Performing Assets ) to get large business, costly gifts , exorbitant fees from companies and to get grand welcome from bankers in lieu of illegal favour they extend to borrowers and bankers.

As such it government and CBI want to trap real cuprits and guilty bank officials, they will have to scan the role played by CAs in nexus with bankers and borrowers.

Opponents of Mr. Narndra Modi, Mr. Arun Jaitley and Bhartiya Janta Party government are asking questions why governmnt could not stop Mallya going out of country and why did they delay in trapping Mallya. I would like to say here that anyone in this country is not arrested as per sweet will of ruler or as per whims of officials. There is well established framework to put anyone under trial , prove him guilty and then act to execute the court order. They justify the act of Kanhaiya Kumar even if he shouts anti-India slogans and they question police arresting Kanhaiya Kumar. But they do not feel shame in asking why Mallya was not arrested by Modi goveernmnt. They have just made mockery of democracy . They know Mr. Mallya is Member of Parliament and he cannot be arrested in improper way as leaders of Congress Party and opponents of Modi are suggesting to do.

It is Congress Party led government which remained silent spectator for years and decades on all news of growing bad debts in banks and ill-motivated act of bankers in hiding bad debts by applying illegal ways and means.It is they which did not act against Mr. Mallya even though account of Kingfisher was declared as Non-Performing Asset in the year 2011. It is they which wasted more than three years time in deciding whether the default was willful or not.

It is Congress Party government  which did not act against officials of DRT who worked in nexus with defaulting borrowers in postponing action against defaulters for years and decades. It is they which did not act even after bas pointd out gigantic numbers of cases pending in various courts filed against bank loan defaulters. It is they who did not take propr and adequate against erring bank officials in several exposures which took place during tenure of UAPA government.

So far as media men are concerned who are crying on TV channels or writing many articles and blogs against BJP governmnt or Mr. Modi to serve thir political masters , I would like to say that these media men do not have even little idea of processesing  which take place prior to loan sanction or processing  of recovery of bank loan which is possible for bankers in recovery of thir dues from bank loan defaulters. They are simply adding fuel to fire by equating the case of absconding Mallya with burning and beating of defaulting farmers by musclemen of Lenders simply to make their debate firebrand . It is they who are sprading misinformation and who are misleading and polluting minds of common men by carrying out false propaganda on their TV channels.

I want to say here in brief, these media men are real curse  for good governnance. They are exploiting all incidents and all cases of loot to increase their TRP. They are projecting stories of bad debts in Bank in inflammatory way as they are projecting anti-national act of Kanhaiya Kumar and his brigade in JNU as act of fusing right of freedom of expression.

Media men  have no right to tag Mallya with word like 'absconder' or 'anti-national ' as long as his case is pending in court of law. Similarly they have no right to exonerate Kanhaiya Kumar and his brigade until the cases filed against them by police in various court is decided after completing required judicial process and trial.

Media men may also be subjcted to defamation case by Mallya if they continue to malign his image without  waiting court trial and court order in this regard. Media men often take law in their hands and sit on trial to declare a person innocent or criminal as per their whims and fancies. It is they which are misusing right of freedom of expression . If they are not regulated, they may cause much damage to this country and to culture of Indian society.