This refers to 1500 points fall in sensex today due to default of IL& FS . Market was volatile during entire day session. Investors lost huge money due to sudden , unexpected, unprecedented and dramatic fall in the market.
RBI does not act , does not audit a financial company including bank and does not discharge its duty till huge losses occurs and till the amount of scam or fraud committed by a company or a bank assumes the form of economic disaster . Our country has witnessed many large scale scams AND several instances of financial fraud with the system every five to ten years but we never learn lessons from our failures. Harshad Mehta scam, Ketan Parekh scam, Satyam Computer scam, UTI scam, biggest scam in form of Non Performing Assets in banks , LIC housing finance scam are few examples of financial indiscipline and indifference of regulating bodies.
GOVERNMENT usually remains silent spectator till it's vote bank is disturbed. One may write hundreds of letters to GOI , to MOF or to RBI, none will be taken seriously until there is an explosion in market or on TV channels.
Similar is the position of all regulating agencies like SEBI, RBI, MOF, CAG BBB etc. Officers sitted at top post in all ministries, departments, banks, public sector undertakings and insurance companies enjoy comfort and luxury of post till system fails and till huge loss is incurred.
NPA IN Public sector banks has been rising every quarter for last ten years but RBI never took any effective action. UPA government headed by deaf and dumb PM Mr Manmohan Singh and clever FM like Chidambaram promoted dirty culture of evergreening of loan to all borrowers of all sectors and finally writing off of loans and now country is paying heavily for their foolish and ill motivated decisions.
I have no doubt that banks , NBFC and LIC together will give a great jolt to our economy of dimension worse than that of subprime crisis which caused loss to USA economy in the year 2008. This has to happen sooner or later because banks and NBFC are in practice of borrowing short term fund and investing them in long term projects where return of money in time is never guaranteed. This culture is being followed in all financial institutes for last two decades and more and the same was dictated by none other than government led by Congress Party. Corruption at all levels add fuel to fire.
It is this Congress party which forced PSU banks to finance thousands and lakhs of crores of rupees during ten years of UPA rule without assessing technical viability and economic feasibility of the project financed just to achieve higher rate of credit growth and GDP growth.. This party imposed culture of loan mela on banks. This party damaged repayment culture by forcing banks to write off small bad loans or enter into compromise settlement with high value wilful defaulters. This party is responsible for inefficiency in judiciary. Loan cases filed in courts or DRTs remain unsettled for years and decades.
As a result position of lenders like bank and NBFC become pathetic as soon as they give loan to any person or firm. Restructuring of bad loan or evergreening of bad loan or selling bad loans to Asset Reconstruction Companies or creation of bad bank to hide bad loans or issue of bonds to get more funds are nothing but postponing the treatment of patients till it succumbs to death. All these ideas are donated to system by ministers heading UPA GOVERNMENT.
It is undoubtedly a tough task for current government headed by Mr Narendra Modi to handle such huge crisis emanating from financial indiscipline . It is true that PM Mr Modi and FM Mr Arun Jaitley are seriously active to contain the alarming situation. Still repercussions of financial indiscipline already undertaken during last two decades is enormous . Only God can save us from evil forces active in administration, in judiciary and that in government.
After eruption and exposure of every scam or fraud in financial transactions, mediamen cry on TV usually for few days, RBI officers promise to control the situation and government assures people of India that erring officials will be taken to task and none will be spared and finally government assures of taking corrective action. Unfortunately none of them take preventive action to nip in the bud.
But unfortunately after a week or two everyone forgets and instead of punishing erring persons guilty persons are awarded.
At most a committee is formed which never submits its report or which submits report as per whims of rulers or its suggestions are allowed to rot in files for years and decades. No effective steps are taken to stop recurrences of such irregularities and lapses. This is why we have to witness frauds and scams very frequently in India. Ultimately it is taxpayers , investors and savers who have to bear the losses.
After eruption and exposure of every scam or fraud in financial transactions, mediamen cry on TV usually for few days, RBI officers promise to control the situation and government assures people of India that erring officials will be taken to task and none will be spared and finally government assures of taking corrective action. Unfortunately none of them take preventive action to nip in the bud.
But unfortunately after a week or two everyone forgets and instead of punishing erring persons guilty persons are awarded.
At most a committee is formed which never submits its report or which submits report as per whims of rulers or its suggestions are allowed to rot in files for years and decades. No effective steps are taken to stop recurrences of such irregularities and lapses. This is why we have to witness frauds and scams very frequently in India. Ultimately it is taxpayers , investors and savers who have to bear the losses.
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