Govt of India using adjudication bodies to "help out" corporate defaulters of banks: TU-civil society meet

A joint meeting of civil society and trade union organizations has accused the Government of India of making frenzied attempts of pushing nationalized banks through Reserve Bank of India to take defaulting companies to the National Company Law Tribunal (NCLT), and start bankruptcy proceeding. This, the meet said, is a major reason for a sharp rise in non-performing assets (NPAs) of banks.
Providing an example, the meet was told, Bhushan Power and Steel Ltd defaulted on Rs 37,248 crore, and now under the Insolvency and Bankruptcy Code (IBC), 2016 -- the insolvency and bankruptcy law -- Tata Power and JSW Steel Ltd have bid Rs 17,000 crore and Rs 11,000 crore to buy it up.
If the deal materializes, banks will lose over Rs 20,000 crore of public money and companies will just shake off their debt without any repercussion. Hence, the more companies are taken to NCLT, the more loss for banks. Especially smaller banks which unable to provide provisions will go bust, it was pointed out.
A quasi-judicial body that adjudicates issues relating to companies in India, NCLT was established under the Companies Act 2013 and was constituted on June 1, 2016. It consolidates corporate jurisdiction of the Company Law Board, Board for Industrial and Financial Reconstruction (BIFR), Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the powers relating to winding up or restructuring and other provisions, vested in High Courts.
Organized in Delhi by Act Now for Harmony & Democracy (ANHAD), All India Bank Officers' Confederation (AIBOC), Centre for Financial Accountability (CFA), Delhi Solidarity Group (DSG), National Alliance of People¹s Movements (NAPM), and New Trade Union Initiative (NTUI), the meet discussed on how the government is letting go wilful defaulters of bank scams.
The meeting was organised in the wake of recent spate of fraud unearthed at the Punjab National Bank, which "exposed" the crises and challenges being faced by public sector banks in general, and poor strategies of the government to deal with rising NPAs.
Among those who addressed the meeting included Gautam Modi, general secretary, NTUI; CPI(M) leader Nilotpal Basu; Anupam from Swaraj India; MK Venu, senior journalist with the "The Wire"; Mohan Guruswamy, policy analyst; Meera Nangia from Delhi University; and Moumita from AIBOC.
Pointing out that big corporations who owe 80% of NPAs go scot-free, speakers said, according to government data, between 2014 and 2017, in all 1,146 cases of fraud cases were registered where employees of public sector banks were involved. Another and 568 cases have been registered vis-a-vis private sector banks.
"The same data also shows that considering that 70% of market share is held by the public sector banks, and that fraud cases are more in private sector banks compared to their public counterpart", the meeting was told.
Speakers said, looking at only the scams would be myopic if we do not consider the ‘legal’ loot of public money -- the write-offs. Just in 2016 -17 alone public sector banks had written-off Rs 81,683 crore worth of bad loans. The Punjab National Bank alone had written-off Rs 9,205 crore.
It was also suggested that the recovery rates of loans in IBC have "not been encouraging", and in some cases banks only got 6% of the total loan. At the core of the problem lies in the fact that the larger the loan, lesser the security and collateral. Hence it is easier for big borrowers to get large loans from banks without much risk. This cavalier attitude has plummeted into a banking sector crisis.

Comments

Irrational? Basis for fear among Hindus about being 'swamped' by Muslims

I was amused while reading an article titled "Ham Paanch, Hamare Pachees", shared on Facebook, by well-known policy analyst Mohan Guruswamy, an alumnus of the John F. Kennedy School of Government, Harvard University, and the Graduate School of Business, Stanford University. Guruswamy, who has also worked as an advisor to the Finance Minister with the rank of Secretary to the Government of India, seeks to probe, as he himself states, "the supposed Muslim attitude to family planning"—a theme that was invoked by Narendra Modi as Gujarat Chief Minister ahead of the December 2002 assembly polls.

Why's Australian crackdown rattling Indian students? Whopping 25% fake visa applications

This is what happened several months ago. A teenager living in the housing society where I reside was sent to Australia to study at a university in Sydney with much fanfare. The parents, whom I often met as part of a group, would tell us how easily the boy got his admission with the help of "some well-meaning friends," adding that they had obtained an education loan to ensure he could study at a graduate school.

Tracking a lost link: Soviet-era legacy of Gujarati translator Atul Sawani

The other day, I received a message from a well-known activist, Raju Dipti, who runs an NGO called Jeevan Teerth in Koba village, near Gujarat’s capital, Gandhinagar. He was seeking the contact information of Atul Sawani, a translator of Russian books—mainly political and economic—into Gujarati for Progress Publishers during the Soviet era. He wanted to collect and hand over scanned soft copies, or if possible, hard copies, of Soviet books translated into Gujarati to Arvind Gupta, who currently lives in Pune and is undertaking the herculean task of collecting and making public soft copies of Soviet books that are no longer available in the market, both in English and Indian languages.

Gujarat slips in India Justice Report 2025: From model state to mid-table performer

Overall ranking in IJR reports The latest India Justice Report (IJR), prepared by legal experts with the backing of several civil society organisations and aimed at ranking the capacity of states to deliver justice, has found Gujarat—considered by India's rulers as a model state for others to follow—slipping to the 11th position from fourth in 2022.

Punishing senior citizens? Flipkart, Shopsy stop Cash on Delivery in Ahmedabad!

The other day, someone close to me attempted to order some goodies on Flipkart and its subsidiary Shopsy. After preparing a long list of items, this person, as usual, opted for the Cash on Delivery (popularly known as COD) option, as this senior citizen isn't very familiar with online prepaid payment methods like UPI, credit or debit cards, or online bank transfers through websites. In fact, she is hesitant to make online payments, fearing, "I may make a mistake," she explained, adding, "I read a lot about online frauds, so I always choose COD as it's safe. I have no knowledge of how to prepay online."

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.

Of lingering shadow of Haren Pandya's murder during Modi's Gujarat days

Sunita Williams’ return to Earth has, ironically, reopened an old wound: the mysterious murder of her first cousin, the popular BJP leader Haren Pandya, in 2003. Initially a supporter of Narendra Modi, Haren turned against him, not sparing any opportunity to do things that would embarrass Modi. Social media and some online news portals, including The Wire , are abuzz with how Modi’s recent invitation to Sunita to visit India comes against the backdrop of how he, as Gujarat’s chief minister, didn’t care to offer any official protocol support during her 2007 visit to Gujarat.

Area set aside in Ahmedabad for PM's affordable housing scheme 'has gone to big builders'

Following my article on affordable housing in Counterview, which quoted a top real estate consultant, I was informed that affordable housing—a scheme introduced by Prime Minister Narendra Modi—has deviated from its original intent. A former senior bureaucrat, whom I used to meet during my Sachivalaya days, told me that an entire area in Ahmedabad, designated for the scheme, has been used to construct costly houses instead.

Just 5% Gujarat Dalit households 'recognise' social reformers who inspired Ambedkar

An interesting survey conducted across 22 districts and 32 villages in Gujarat sheds light on the representation of key social reformers in Dalit households. It suggests that while Dr. B.R. Ambedkar's photo was displayed in a majority of homes, images of Lord Buddha and the 19th-century reformist couple, Savitribai Phule and Jyotiba Phule, were not as commonly represented.

Search This Blog