Communist Party of India (Marxist) leader Nilotpal Basu on Friday said the present crisis in the banking sector is part of a larger crisis the country is facing on multiple fronts.
“Corruption today is not moral degeneration but a systemic loot. It results in huge accumulation and inequity,” Basu said speaking at a meeting here that focussed on the topic — “Crisis in the banking sector: Who stole? Who pays?”.
Speakers at the meeting — organised in the wake of a $1.8 billion fraud unearthed at the Punjab National Bank (PNB) — accused the Narendra Modi government of knowingly allowing wilful loan defaulters to leave the country.
According to a government data, 1,146 fraud cases in public sector banks (PSBs) were registered where employees were involved, and 568 in private sector banks during 2014-2017.
The same data also showed that while 70 per cent of market share is held by the PSBs, fraud cases are more in the private banks compared to their public sector counterparts.
“India is becoming a nation of defaulters. Why do defaulters get to buy new companies and new deals?” said policy analyst Mohan Guruswamy, adding that by their overt and covert support to these defaulters, the governments in power send a message to banks not to act against them.
“There are a number of Nirav Modis and Mallyas committing wilful default, but the government is not taking action,” said senior journalist M. K. Venu.
The country’s second largest state-run bank PNB on February 14 unearthed a fraud of Rs 11,300 crore involving diamantaire Nirav Modi.
The fraud, which included money-laundering, among others, is related to the Firestar Diamonds group. The Central Bureau of Investigation (CBI) has booked Modi, his wife Ami, brother Nishal Modi and uncle and business partner Mehul Choksi — the promoter of luxury jewellery brand Gitanjali Gems.
The speakers demanded punishment for both the officers involved in frauds and the wilful defaulters.
They also called upon the authorities to change the lending policy of banks to have one with more checks and balances, especially for large lendings, and more importantly, end crony capitalism.
The public meeting was jointly organised by Act Now for Harmony and Democracy (ANHAD), All India Bank Officers Confederation (AIBOC), Centre for Financial Accountability (CFA), Delhi Solidarity Group (DSG), National Alliance of People’s Movements (NAPM), and New Trade Union Initiative (NTUI).
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