Skip to main content

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

By Our Representative
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, 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

TRENDING

Missed call drive for VVPAT verification follows online plea to "pressure" poll panel

By Our Representative
Several political activists have begun a new campaign, asking concerned citizens to give a missed call on 9667655855 to “support the demand that 2019 Loksabha elections must be declared only after verification of 50% electronic voting machines (EVMs) with Voter Verifiable Paper Audit Trail (VVPAT) receipts.” The effort, supported by civil society networks across India, is meant to "further pressure" India's election machinery to ensure that the poll outcome becomes more transparent.

Did Modi own, buy digital camera costing Rs 7 lakh in 1987-88, also used email?

Counterview Desk
In an interview to the news channel News Nation, aired on Saturday last, Prime Minister Narendra Modi declaring that he had approved the air strike despite bad weather because he felt the clouds would hide Indian planes from Pakistani radar is known to have become a laughing stock across India.

Now, top Gujarat "litterateur" close to Modi says: Godse was patriot, so was Gandhi

By Rajiv Shah
A little over a week after Prime Minister Narendra Modi criticized BJP candidate from Bhopal Pragya Thakur for calling Nathuram Godse a patriot saying he would never forgive her for the remark, a top Sangh Parivar ideologue, known to close to Modi in Gujarat, has supported her, saying her statement should be seen “within a context.” Thakur won from Bhopal by more than 3.5 lakh votes defeating her nearest rival, veteran Congressman and ex-Madhya Pradesh chief minister Digvijay Singh.

When a neo-nationalist "invaded" hijab clad ladies, Bengali looking scholar in Delhi metro

By Aditi Kundu*
Travelling in Delhi metro on a daily basis to commute from Mayur Vihar to Dwarka, I see diverse people everyday. One can hear them talk about different aspects of life, from kitchen pilitics to national politics. On the morning of May 13, I witnessed a strange incident; disturbing and amusing at the same time.

Terror attacks: Difference in public reactions in India, those in Colombo, Christchurch

By Battini Rao*
Recently, on April 20 during Easter Sunday, more than 250 people were killed in a series of coordinated terrorist attacks in churches and hotels in Colombo, Sri Lanka. Local Islamic organisations Thawheed Jamath (NJT) and Jamathei Milathu Ibrahim (JMI) are held responsible for the attack. Islamic State has also claimed responsibility.

Women lost 88 lakh jobs in 2018: Why Modi "failed" to address their disempowerment?

Counterview Desk
Five human rights leaders Anjali Bhardwaj, Shabnam Hashmi, Purnima Gupta, Dipta Bhog, and Amrita Johri of the Women March for Change have posed 56 questions (alluding to Modi’s claim of 56 inches chest) to Prime Minister Narendra Modi and BJP against the backdrop of his interview with a Bollywood star, which was allegedly masqueraded as a “non-political” conversation.

Disproportionately high death sentences against Dalits, Adivasis, Muslims: UN told

Counterview Desk
In their joint submission to the United Nations Human Rights Committee to meet for the listing of adoption of list of issues at its 126th session, July 1-26, 2019, top Dalit rights organizations have taken strong exception to, among other things, "disproportional application of death sentencing by the judiciary of minorities, such as Muslims, Dalits and Adivasis".

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.

India's 80% construction sites "unsafe", deaths 20 times higher than those in Britain

By Rajiv Shah
The Government of India may be seeking to project India’s construction sector as the country’s second-largest employer of the country after agriculture, providing jobs to more than 44 million people, and contributing nearly 9% to the national GDP, yet, ironically, its workforce is more unprotected than any other industrial sector of the country. Data suggest that the possibility of a fatality is five times more likely in the construction industry  than in a manufacturing industry, and the risk of a major injury is 2.5 times higher.

India sans Modi preferable, Congress worthier recipient of Indians’ votes: The Economist

By Our Representative
In a strongly-worded and crucial commentary on Prime Minister Narendra Modi as the electoral political battle is on, influential British weekly “The Economist”, has declared that “Indians, who are in the midst of voting in a fresh election, would be better off with a different leader”, even as pointing out that that under Modi, “India’s ruling party poses a threat to democracy.”