Is Banking in India in a Soup?

Banks in India are basically cookie jars where the system allows fraudsters mainly politicians or politician protected entities to put their hand in and take whatever they want and don’t pay back. Non-Performing Assets (NPAs) of Banks in India is in the Public Domain. Staggering figures just written off of big business houses, select business tycoons and Industrialists by governments in power. Then as long as ordinary citizens didn’t face any issues, the cookie jar would get replenished by tax payers’ money and the legal robbery continued as usual.

Then are bank classifications in India. There are PSU Banks which are govt. controlled, Private and International Banks and then a section called Cooperative banks. This is where politicians who are normally involved in ‘cooperating’ and wiping of the poorest of poor citizens meagre saving deposited in such banks. These banks then turn turtle, ending with poor depositors losing their money. Again something that is in public domain that shows number of banks that closed shop, leaving depositors high and dry. As most of these banks are in rural areas the marginalized and poor have no resource and money to fight in courts. Then even if one attempts to knock the doors of justice in India, you end up closed in a door of a coffin with the time taken for justice to be meted, and if it is justice or if there is justice?

One of such banks which went bust was another classification of banking called Urban Cooperative Bank, and this was Punjab and Maharashtra Cooperative Bank. Today 23 Sep 2022 marking three years completing leaving nearly 300 depositors killed and few suicides with no access to the own money. On 24 Sept 2019 PMC Bank depositors get a SmS stating that that the bank was slapped with sanctions and depositors could with draw only One Thousand Rupees, later increased to Ten Thousand Rupees and finally One Hundred Thousand Rupees (One Lakh Rupees). So the amount works out One Hundred and Nineteen Rupees a day. So family of four would need to survive on approximately 29 Rupees a Day which is 29 cents in dollar terms per person. An amount where one would not be able to survive in the poorest of nations in the world. The last withdrawal amount was Five Hundred Thousand Rupees (Five Lakhs) which again cannot sustain a family. Then look at this way, citizens own money given in charity and that too begged for. A simple no brainer would be if Bank Deposits can be guaranteed only up Five Lakhs, why can’t be loans disbursals above 5 lakhs be against collaterals. Business Tycoons like Lalit Modi, Vijay Mallaya, Mehul Choksi or Nirav Modi who defraud banks fly out to safe havens like UK or like Anil Ambani declare bankruptcy and live in luxury. A common man if he takes a loan and defaults collection agency and even goons are at his door step to demand payment

The irony is it was a fraud and that too done despite the matter whistle blown by a Bank employee in 2011, to the Financial Monetary agency The Reserve Bank of India (RBI). PMC Bank given the highest and best rating for banking services by this same RBI. The fraud was done in such a simple manner where the Bank gave more than 70% of its deposits to one entity, which is illegal. So to legalize it more than 20 thousand fictitious accounts were created and money siphoned off to these accounts. What were the Auditors and RBI regulating Inspectors doing? Unfortunately for the govt. PMC Bank depositors refused to be sitting ducks. Their protests ensured the govt. bend on their knees and change the minimum guarantee of insurance on deposits from One Hundred Thousand Rupees (USD 1332) to Half a million Rupees (USD 6661).

A joke in the International community where India plans to be a 5 trillion US dollar economy but cannot guarantee citizens money in a Bank. This was not a scam which suddenly came to light one day, but organized crime with certain RBI officers conniving in the theft. How would one explain a retired RBI General Manager, Mr. Laxman Kamle getting employed with PMC Bank post his retirement? An ex RBI official who was responsible for overseeing certain functioning of Cooperative Banks! That too employed with PMC Bank immediately after an employee had Whistle Blown the wrong doings of the Bank? So why was he employed with PMC Bank post his retirement? That too in HR Department? Was this to ensure Human Resources involved in the Scam are protected and the whole matter kept under the wraps which unfortunately could not cover the scam? Then was one of the accused Director, Daljit Bal who was caught on the border trying to escape into Nepal. Post his being jailed he gets bail? If he was innocent why was he trying to escape? So would the real culprits, the Wadhwan’s Father and son too get bail? As this is what somehow the legal system functions in India. Will this Father and son be kept in jail till every PMC Depositor is paid their entire deposit with interest? Allegedly the Father is enjoying First Class Medical Treatment for a while and PMC Bank ailing depositors cannot access their money for to medical expenses. Is this the legal system in India? The million dollar question is has or why not any RBI official till date put in the docks for this scam? Or was million dollars traded to save their thick skin? Do they enjoy some corruption immunity?

Post the scam breaking the Wadhwans even confirmed that they would pay all depositors if they could be let out of jail. Why was this not allowed? Wadhwan’s properties if sold could easily pay off all depositors and PMC Bank could have continued with better monitoring of agencies concerned. Why did the RBI put a stay to the sale of properties? Could it be that these properties were shown undervalued on records as black money funneling, maximum in India is done through real estate? In the recent past Cooperative Banks with some irregularities in their functioning was allowed to continue with a fine imposed. Why could this be not done for PMC Bank?

Why PMC Bank not liquidated and the Bank amalgamated by two business entities Centrum and BharatPe to form a new Bank called Unity Small Finance Bank. Why could these entities not just apply for a fresh SFB License? Is this some kind of back door entry for the Wadhwan’s to ensure their properties if sold comes to this entity Unity SFB and their interests not jeopardized? Why is there is no legal decision given that whenever the properties are sold and whichever properties have clear title and first right of claim for PMC Bank, the depositors would be paid off? The amalgamation scheme which was protested and not accepted by PMC depositors would be paid their money in 10 years. Out of which first five years principle paid with no interest and post that a measly interest of 2.75% p.a. (with inflation at 6% plus ) and balance principle paid at the end of the 10^th years. Nearly 300 killed and few suicides with no access to their money in 36 months. PMC Bank depositors will fight to the end. The salt rubbed on the wounds of surviving depositors was Unity Bank SFB coming out with OTS One Settlement Scheme (read OTK One Time Killing) where depositors could take their first 5 years pay out of only principle with around 38% haircut. Unity SFB always throws the ball back into depositors’ courts on their agitation claiming that the amalgamation scheme was devised by RBI? Was this One Time Settlement scheme approved by the RBI?

The govt. used the media to show they are paying all depositors and showcasing one sided statistics of 95% plus depositors getting their money and hiding the percentage of amount of money value paid out. If the percentage of money paid was shown it would have been only 10% to 20% money paid and balance 80% to 90% of deposits not paid.

If India(ns) unites and remove all their money from Cooperative Banks in protest and demand for PMC Bank depositors be paid, PMC Bank depositors will get justice in a week. Then an India that is divided on lines of caste, creed and religion need to realize that their money cannot be protected because of their caste, creed and religion. When a Bank goes bust it is not one community that gets effected, it is an Indian that pays the price and like the hundreds of PMC Bank depositors maybe even pay with their life. Wake up India(ns). In the recent few months, the amount of Cooperative Bank licenses that are cancelled, and depositors get only up to 5 lakhs of their deposits. Why are Indians still keeping their money in Cooperative banks? We are made to fight amongst ourselves with divisive politics. We are being taxed on basic food essentials and matters that get highlighted in the media are Cheetahs imported from Africa, when many Indians are starving or starved like PMC Bank depositors with no access to their money.

Why can’t or when will India have 100% sovereign guarantee of citizens money in a Bank? Why can’t or will India ever have a speedy justice system for victims of crimes and not just speedy but instant bail for criminals? Will India ever have a governance of honest and educated people in power? Then the question is who votes them to power. Despite knowing that many are criminals, not educated or prides in being a tea seller and motivates the educated to be entrepreneurs and sell road side snacks. Indians it’s time to smell the coffee or maybe the tea. As our Banking Industry in India is definitely in a Soup of tea.