The “Great” Indian Heist: Exposing the Crony Bloodsuckers
The “Great” Indian Heist: Exposing the Crony Bloodsuckers
The “Great” Indian Heist: Exposing the Crony Bloodsuckers
Posted on 30th December, 2024 (GMT 09:35 hrs)
ABSTRACT
The article exposes systemic corruption and financial mismanagement in India’s banking sector, highlighting massive loan write-offs totaling ₹12.3 lakh crore over a decade, primarily benefiting corporate defaulters. Despite these write-offs, recoveries remain abysmally low, raising concerns about regulatory oversight and political complicity. The top wilful defaulters owe nearly ₹2 lakh crore, with key figures like Mehul Choksi escaping accountability. The report emphasizes the urgent need for transparency, accountability, and reform to protect public funds from systemic exploitation.
This time, we will be starting off with a very recent report that has been released, which leads to certain significant repercussions when it comes to talk about the crumbling state of the present Indian economy under the crony oligarchical regime of the BJP, especially in addressing the holistic backdrop of the DHFL Scam victims’ justified demands.
The said report could be summarized for our readers’ benefit as follows:
Between the financial years 2014-15 and 2023-24, Indian commercial banks wrote off loans totaling ₹12.3 lakh crore, a sum comparable to India’s annual defense budget.
Public sector banks (PSBs) accounted for ₹6.5 lakh crore of these write-offs over the past five years (FY20-24). The peak occurred in FY19 with ₹2.4 lakh crore written off, decreasing to ₹1.7 lakh crore in FY24, representing 1% of total outstanding bank credit.
Notably, the State Bank of India led with ₹2 lakh crore in write-offs over the decade, followed by Punjab National Bank at ₹94,702 crore. As of September 30, 2024, gross non-performing assets (NPAs) were ₹3,16,331 crore for PSBs (3.01% of outstanding loans) and ₹1,34,339 crore for private sector banks (1.86% of outstanding loans).
In the first half of FY24 alone, PSBs wrote off loans worth ₹42,000 crore. Despite these substantial write-offs, there appears to be a lack of accountability for the bankers involved, raising concerns about the management of public funds and the effectiveness of regulatory oversight on the part of the “vigilant agencies”, who seem to have consumed a considerable amount of sleeping pills.
Additionally, the Reserve Bank of India (RBI) itself reported a significant increase in bank frauds during the first half of the current fiscal year. From April to September 2023, 18,461 fraud cases were reported, involving ₹21,367 crore, marking a 28% rise in the number of cases and an eight-fold increase in financial impact compared to the same period last year. Digital or cyber frauds, including internet and card-related scams, accounted for 44.7% of the total amount defrauded and 85.3% of all cases reported. Private sector banks reported the majority of fraud cases (67.1%), while public sector banks suffered the highest financial losses, especially in card and internet fraud categories.
These developments highlight the pressing need for enhanced regulatory measures and greater accountability within the Indian banking sector to safeguard public funds and maintain financial stability in the long run. However, is anything of that sort happening? Is the incumbent ruling party bothered about this concerning situation at all?
SOURCES:
Banks Write Off Rs 12.3Lakh Crore in Loans, Equal to India’s Defence Budget; No Accountability for Bankers?? VIEW HERE ⤡ (As reported on 17th December, 2024 ©The 420)
In 2022 Q3, bankruptcy cases increased by 25%, with recovery rates plummeting to 23.45%. This resulted in significant “haircuts” for creditors (69.6%!), meaning they had to accept steep losses in the resolution process under the ill-conceived, amended IBC (2016). While insolvency filings are rising, the recovery rate remains dismal, reflecting systemic inefficiencies under the Insolvency and Bankruptcy Code (IBC) itself. The growing trend of defaults suggests deeper issues in corporate debt restructuring in India.
Bankruptcy cases rise 25 per cent in Q3; recovery lowest at 23.45 per cent: Care Ratings VIEW HERE ⤡ (As reported on 20th February, 2023 ©The Economic Times)
Furthermore, this is not “all there is”. There are further aspects to this matter that has taken away the sleep of crores of public depositors, viz., common toiling Indian citizens. The issue of such NPAs (bad loans), correlated with rampant bankruptcies and writing off loans of corporates generates the following data:
As of March 2024, the Reserve Bank of India (RBI) reported that 2,664 corporates have been classified as wilful defaulters, collectively owing ₹1.96 lakh crore to scheduled commercial banks.
A wilful defaulter is defined by the RBI as an entity that has the capacity to repay loans but deliberately avoids doing so, or diverts loan funds for purposes other than those for which they were sanctioned.
The top 10 corporate superrich wilful defaulters (as of latest reports) and their outstanding amounts are:
- Gitanjali Gems Ltd: ₹8,516 crore
- ABG Shipyard Ltd: ₹4,684 crore
- Concast Steel & Power: ₹3,557 crore
- Era Infra Engineering: ₹3,507 crore
- SEL Manufacturing Company Ltd: ₹3,367 crore
- Winsome Diamonds & Jewellery: ₹3,356 crore
- Transstroy (India): ₹3,261 crore
- Rotomac Global: ₹2,894 crore
- Zoom Developers: ₹2,217 crore
- Unity Infraprojects: ₹1,987 crore
Notably, Gitanjali Gems Ltd, promoted by Mehul Choksi, tops the list with an outstanding amount of ₹8,516 crore. Choksi fled India after being implicated in the ₹14,000-crore Punjab National Bank (PNB) fraud.
The number of wilful defaulters has risen steadily over the past four years, climbing from 2,154 in March 2020 to 2,664 by March 2024. The amount of unpaid dues has surged from ₹1.52 lakh crore to ₹1.96 lakh crore during the same period.
These recent developments reveal alarming deficiencies in the lending and monitoring mechanisms of the banking sector, once again emphasizing the urgent need for robust measures to combat the issue of wealthy willful defaults and protect the financial system from avaricious individuals enabled by the ruling political party. The urgency of this situation is compounded by the fact that the information reported is current, leaving the common Indian citizens increasingly anxious. The challenges faced by the Indian economy are entirely unprecedented, and there seems to be a troubling reluctance among the “creamy layer” stakeholders to accept any kind of accountability.
SOURCE:
RBI reveals top 100 wilful defaulters; 2,664 corporates owe Rs 1.96 lakh crore VIEW HERE ⤡ (As reported on 23rd December, 2024 ©The Indian Express)
Let us delve further into the intricacies of the emerged statistics:
Between fiscal years 2019-20 and 2023-24, Indian banks wrote off approximately ₹9.9 lakh crore in bad loans or NPAs, ALLEGEDLY reducing their reported non-performing assets (NPAs). This strategy contributed to allegedly lowering the gross NPA ratio to a 12-year low of 2.8% by March 2024.
Despite these substantial write-offs, recoveries have been limited. Over the past five years, banks recovered only 18.7% of the written-off amounts, totaling ₹1,85,241 crore. This indicates that over ₹8 lakh crore, or 81.3% of the written-off loans, remain uncollected.
The Reserve Bank of India (RBI) has expressed concerns regarding this practice without taking stringent actions as of yet. While write-offs apparently help banks present healthier balance sheets by reducing NPAs, they do not still address the underlying systemic issues of credit risk assessment and recovery mechanisms with regard to public funds/deposits. It is important to note that a write-off does not absolve the borrower of repayment obligations. Banks are still expected to continue efforts to recover these dues even after loans are written off. However, the evidently low recovery rate suggests challenges in the very effectiveness of these efforts.
Loan write-offs help banks to show lower NPAs VIEW HERE ⤡ (As reported on 17th December, 2024 ©The Indian Express)
Non-Godi Media journalist P. P. Bajpai has analyzed this entire scenario and has mentioned the following points:
India’s financial landscape reveals a troubling “crony” corruption nexus where laws, particularly bankruptcy regulations under the Insolvency and Bankruptcy Code (IBC) and the National Company Law Tribunal (NCLT), are exploited to benefit a select few via political intermediaries, making public accountability nearly impossible. Companies often declare bankruptcy to evade debt repayment, with assets undervalued during resolution, resulting in colossal losses for banks and common taxpayers. A glaring example is the Adani Group, which acquired multiple companies at a fraction of their actual value, inflicting significant losses on public sector banks. Since 2015, these banks have written off ₹12.3 lakh crore, recovering only 18.7% of the amount, while maintaining an illusion of profitability in the balance sheet through superficial recoveries. This systemic failure enriches the super-rich at the expense of public funds, burdening the economy and taxpayers, and urgently calls for accountability and structural reform.
Amidst the ongoing transformations, The Banking Laws (Amendment) Bill, 2024, recently passed by the Indian Parliament endeavours to apparently “restructure” India’s banking landscape. This legislation paves the way for the privatization of public sector banks (PSBs) as a key component of a comprehensive disinvestment strategy. By aiming to reduce the government’s stake in PSBs from 51% to 26%, it fosters an environment ripe for private participation. However, this move fuels concerns of deepening alliances between the ruling BJP and affluent business moguls, who frequently benefit from the party’s generous patronage, blurring the lines between accountable, democratic, socialist governance (upheld by the Indian Constitution) and the rising face of crony capitalism.
Hon’ble INC MP Rahul Gandhi had already remarked, quite legitimately, the following:
Hon’ble NCP (SP) MP Supriya Sule, while addressing the Banking Laws (Amendment) Bill, 2024, emphasized the need for transparency regarding the tenures of cooperative bank directors to enhance governance standards. She underscored the importance of prioritizing depositor compensation in instances of financial fraud, rather than focusing solely on punitive measures. Sule expressed her concerns regarding the rise of cyber scams, questioning the government’s collaboration with banks to devise effective solutions. She also pointed out the challenges posed by outsourcing farmers’ loans to NBFCs, which results in increased interest rates. Furthermore, Sule sought clarification on the government’s plans to regulate these practices and to support banks in light of the growing investments in mutual funds. ⤡
The Indian public is not only suffering financial losses due to rampant bankruptcies, fund diversions, and fraudulent transactions hidden from view (despite the BJP’s rhetorical “efforts” to curb black money, terror funding etc., through the futile demonetization in 2017, or the PAN-Aadhaar Card Linking to stop such frauds) but ordinary citizens are also increasingly burdened by arbitrary provisions of the GST1. These measures primarily serve the interests of the ruling elite and their cronies, while scandals like the opaque Electoral Bonds scheme⤡ (legitimized bribery?!) reveal the extensive corporate funding of ruling political parties. Furthermore, the alarming events surrounding the 2024 Stock Market Scam⤡ (about which no discussions could be heard), where the Prime Minister and Home Minister encouraged citizens to buy stocks just before the Lok Sabha election results—an act that defies legal standards—exacerbate the situation, leaving those who invested in haste without support. Additionally, the non-governmental PM CARES fund, which is shrouded in a lack of transparency and to which no RTI requests can be filed, alongside other undisclosed corporate donations to the ruling BJP, solidifies its position as the richest political party ever.
BJP the richest political party with an income of Rs 2360.844 cr during FY 2022-23 VIEW HERE ⤡ (As reported on 1st March, 2024 ©APN News)
This grim reality prompts a troubling question: What does this dire situation signify for the future? Is there any glimmer of hope amid such challenges?
While on one hand, the common citizens face such adverse, over-burdening financial circumstances, on the other hand:
Modi govt’s policies, corporate tax cuts failed to revive economy: Cong VIEW HERE ⤡ (As reported on 12th December, 2024 ©Business Standard)
https://onceinabluemoon2021.in/2023/03/09/do-we-need-a-robin-hood-to-enrich-the-indian-have-nots/
This brings us to a critical decision-making juncture. If we choose to move forward amidst the fragile state of the Indian economy, the wealthiest 1% will continue to benefit at the expense of the hard-earned money of the poor 99%, exposing the stark polarization that has emerged during the fascist BJP’s three consecutive terms. Therefore, public mobilization demanding transparency, accountability, and the dismantling of economic deprivation and discrimination is essential to paving the way for a stable, sustainable, and resilient economy in the near future. Without these changes, future generations will face the crushing burden of an astronomical national debt per citizen, a situation that reflects nothing short of a draconian and disastrous neo-imperialist grand plan orchestrated by the WB-IMF-WTO triad by hook and by crook.
ENDNOTE
- The Goods and Services Tax (GST), implemented in India on July 1, 2017, aimed to unify the national market, enhance GDP growth by 1-2%, reduce inflation, curb the black economy, and simplify the tax structure to improve the ease of doing business. However, several challenges have hindered its success:
Complex Structure: Contrary to the initial promise of a simplified tax system, GST comprises multiple rates and numerous exemptions, leading to increased complexity and compliance burdens for businesses.
Revenue Shortfalls: The anticipated boost in tax revenue has not materialized as expected. Tax evasion and fraud, including the use of fraudulent invoices and fake e-way bills, have resulted in significant revenue losses, undermining the effectiveness of GST.
Economic Impact: The implementation of GST has been criticized for adversely affecting the unorganized sector and small businesses, which face difficulties in compliance due to limited resources. This has led to disruptions in business operations and has been described as a major attack on India’s unorganized economy.
Inflation Concerns: Instead of reducing inflation, GST has, in some cases, increased the tax burden on consumers. For instance, the recent decision to impose varying tax rates on different types of popcorn has sparked public outrage and highlighted the system’s complexity.
Administrative Challenges: The GST system has faced issues related to its architecture and implementation, leading to public criticism and calls for a comprehensive review to address inherent flaws.
While GST was introduced with the objective of streamlining India’s tax system and boosting economic growth, its implementation has encountered significant obstacles, resulting in complexities and challenges that have impeded its effectiveness.
GST and Its Failures: Explained VIEW HERE ⤡ (As reported on 24th July, 2023 ©IMPRIINDIA)
How to tax popcorn? India’s formula sparks outrage against GST system VIEW HERE ⤡ (As reported on 23rd December, 2024 ©Reuters) - https://onceinabluemoon2021.in/2024/09/17/the-modani-saga-the-failed-state-of-india/↩︎
- https://onceinabluemoon2021.in/2024/07/26/the-post-budget-scenario-and-the-ibc-empty-vessel-sounds-much/
- https://onceinabluemoon2021.in/2024/06/25/who-are-the-money-mongers-in-india-hindutvavadins-or-muslims/
- https://onceinabluemoon2021.in/2024/06/14/scrap-ill-conceived-insolvency-and-bankruptcy-code-ibc-2016/
- https://onceinabluemoon2021.in/2024/04/20/bjps-report-card-and-the-manipulation-of-government-agencies/
- https://onceinabluemoon2021.in/2024/04/13/if-ponzi-customers-get-their-money-back-why-not-dhfl/
- https://onceinabluemoon2021.in/2024/04/06/incommensurability-amidst-pmla-and-ibc-in-the-context-of-dhfl-scam/
- https://onceinabluemoon2021.in/2024/03/21/why-did-wadhawan-brothers-cut-a-sorry-figure-to-satisfy-the-bjps-itching-palms/
- https://onceinabluemoon2021.in/2024/02/17/pradhan-mantri-awas-yojana-pmay-a-deliberate-systematic-structural-failure/
- https://onceinabluemoon2021.in/2024/02/09/money-laundering-by-the-ruling-party-of-india-an-open-letter-to-the-financial-action-task-force-fatf/
- https://onceinabluemoon2021.in/2024/01/30/of-all-the-superrich-wilful-defaulters-why-the-wadhawans-alone/
- https://onceinabluemoon2021.in/2023/11/20/fixed-deposits-insecurely-secure-a-letter-to-the-finance-minister-and-rbi-governor/
- https://onceinabluemoon2021.in/2023/08/20/the-chosen-ones-in-indian-political-economy-a-case-study-of-the-dhfl-scam/
Comments
Post a Comment