Vox Populi Issue 236

                                                       VOX POPULI

by
S Kamat
as
Aam Admi
 Issue: 236                        Date: 18.06.2018
Visit: aamadmi.blogspot.com or aamadmivoices.blogspot.com

Contents:
1. The Greatest Show On Earth: World Cup Football Russia 2018
2. PSB Losses: Who's Paying For Them? & The Way Forward
3. You Should Not Have Activist Chief Ministers Like Arvind Kejriwal

The Greatest Show On Earth: World Cup Football Russia 2018

The greatest show on earth, World Cup Football Russia 2018 has begun. What a bang-on start it was for the host nation with a 5-0 drubbing that they inflicted on Saudi Arabia. Putin was all smiles sitting in the stadium alongside the Saudi Prince whose face one could see was getting longer and longer as the game progressed. After that the matches dropped down to the rather drab category with score lines matching them except for the Battle of the Iberias with Ronaldo, the exceptional opportunistic player that he is - though I personally do not like him too much, being a die-hard fan of Messi - single-handedly with his hat-trick drew Portugal level to Span at 3-3. Messi disappointed with the missed penalty bringing credence to his country's charge that he does not do much playing for his home nation, though this year in the qualifier rounds he was better than the earlier years. Starting off the World Cup on a bad note is not going to help Messi in his attempt to win the Golden Boot in what is rumoured to be his last year for turning out for his country. With Belgium's Red Devil’s pulling off a 3-0 victory the score lines are up and hope that continues as the tournament progresses. In the first few days this World Cup is putting one seems the form table or the line-up on those that are expected to take home the Jules Rimet trophy, on its head with Germany losing to Mexico, Argentina put on ice by Iceland and then Brazil held by the Swiss to a draw. There does not seem a dark horse yet but only time will tell. 

PSB Losses: Who's Paying For Them? & The Way Forward

The whopping Rs. 87,000 crores loss or close to it declared by the PSB's in the 2017-18 financial year should be an eye-opener to the government that serious action is indeed required to revamp our banking system. When the issue of capital infusion came up about a year ago, it was projected that with this some of the banks which were not doing well, would be able to recover and progressively come out of the red. 

These statements were made with insiders in the banking system knowing full well that the sword of Damocles was hovering over their heads in the form of the NPA's. That bird of bad loans has now come home to roost at almost all the banks. Misinformation has become a trend now and the tendency to suppress negative issues while projecting the positives in an exaggerated manner has become a common methodology and the banks and government using these methods is nothing new. Almost every single bank mostly PSB's has been affected which speaks of the rot within the banking system. It has got nothing to do with business risk or market downturn which could be true in some exceptional cases but generally the bad loans have been a result of collusion between the bankers and the trade and industry to defraud public money. They therefore need to be held responsible and accountable for their misdeeds. A case in point is the Nirav Modi scam where the PNB officials played along and Modi took advantage of this to the hilt almost to the extent of bringing PNB down. Just like hordes of vultures are attracted to carrion so also is the wilful defaulters portfolio at PNB increasing as reported at some Rs. 1450 crores since looking at the Nirav Modi the borrowers are adopting the philosophy that PNB is fair game. The malaise that has struck the PSB's has also affected the private sector banks like shown in the ICICI scam involving the Kochhar family and the Videocon group.

Therefore it is time that the government brought the guilty in the banking system who are responsible for the creation of the NPA's to book and proceeded criminally against them. No one should be spared and irrespective of the level that they occupy at the banks, criminal charges should be brought against them. This should apply to all bankers including those that that have retired as well as those serving currently. Unless this is done the message will not go across that the government means business on the NPA issue. The government in the recent past has been chary of instituting enquiries on the NPA's for fear of it being called a witch-hunt and generating a scare scenario among bankers. The bankers on their part have been blackmailing the government by slowing down sanctions of new institutional credit and claiming and also obtaining safety guarantees from legal action against them. This cat and mouse game has to stop and direct action initiated to prosecute all those within the banking system who are guilty of generating the NPA's and also action need be taken against the borrowers who may have resorted to illegal means in obtaining and/or utilising the loans. 

In the meanwhile the banks have been year by year writing off the NPA's, one does not know whether this is being done selectively where convenience deals have been worked out between the bankers and the borrowers. The question is who is bearing the cost of these write-offs and in turn the NPA's, it is the common man or the average savings account holder at the bank whose cost of using banking services has year by year been going up and the banks keeps on levying conditions like unreasonable minimum balance and charges fees on one pretext or another. This to make a category of people selectively rich the average citizen's pocket is being picked by the government run banks. We are not bringing the private banks into this since there you have a choice of moving away to other banks. While with PSB's where the terms and conditions are more or less uniform across different banks there is not much choice left for the account holder but to pay through his nose. 

The methodology that can be adopted is to expand upon the present process of auctioning off the assets of the borrower Co. to recover part of the NPA's by transferring all the NPA's to a Bad Loan Corporation (BLC), staff the BLC with specialist persons competent in finance and sector-wise expertise, and then progressively take action to prune the NPA's. This will take a generation to resolve but a start would have been made. The banking system relieved of the NPA's and the people connected with generating them out of the way, the banks and the industry can start off on a clean slate  to give the country a banking system it deserves which should be reactive, responsive to customers, efficient and cost-effective. This is the only way forward otherwise we will continue to be pussy-footing on issues while watching each of the PSB's going into bankruptcy over a period of time. This process requires political will also and it is time that the incumbent government belled the cat instead of being weighed down with concerns of this election or that.

                           You Should Not Have Activist Chief Ministers Like Arvind Kejriwal

When activists like Arvind Kejriwal become Chief Ministers they are unfortunately unable to forget their previous background. When Kejriwal was part of the Anna Hazare movement which led to the formation of the Aam Aadmi Party the same activist orientation was seen. Further back when you sought an opinion from Kejriwal, he would somehow manage to link it to RTI which was his strength or competence area. For activists results are not important. For them the process of protest and the fact that there is a protest is important. Thus after becoming the Chief Minister of Delhi with the AAP getting a stupendous majority instead of assessing his position, analysing it properly and then deciding upon a work strategy to meet his constitutional responsibilities, Kejriwal started ranting against Modi and the LG and the Central government. Now Kejriwal is not without intelligence but it was patently clear that he was following a wrong strategy of blaming the Centre for everything. This kind of thing is done when a person is convinced that he cannot deliver on the job and then manufactures excuses to throw a smokescreen around himself in the hope that he can divert the attention of the people. Everyone in Kejriwal's opinion is wrong. Now this cannot happen since if you tend to blame everyone then you in fact turn the spotlight back to yourself and your party and people will start asking the question - What's wrong with these guys? The present support that Kejriwal has been receiving from the TMC, JD(S), Telugu Desam and the CPI(M) is only opportunistic keeping a view on the 2019 elections and to wave the flag of Opposition solidarity. If the upcoming Lok Sabha Elections were not there none of these parties would have even given Kejriwal a glance.

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