pnb fraud

 pnb fraud is astounding . as usual system failure is evident. and as usual the whole thing may end with the crucifixion of a manager or two . and that in brief is the biggest malady banking industry is facing . nay the country is facing . the country has been facing . the country is likely to face for ever .


  rbi 

let us start at the top. what exactly has rbi been doing ? modi's should be one of the the biggest loan accounts in the branch . there is no way rbi can skip this account in its inspection. did they ever comment on the risk of default of this giant borrower ? did they suggest any precautions ? did they study the performance of diamond industry as a whole and try to interpolate modis for a comparative analysis ? or are these things too much to expect from an rbi inspection ? if they indeed are , isn't it time to scrap this exercise ?

lou have most probably been issued in the past too . ( luckily they didn't devolve on the bank). did rbi look for a credit appraisal and ensure a proper sanction ? did they see what the securities are ? did they confirm that the goods expected to be imported did arrive and was properly hypothecated to the bank in these past lou . did they rule out the chance that past lou were cleared just by book adjustments ?


   pnb  head office

let us come down to the bank head office . credit monitoring set up in ho should have done all that rbi inspection is supposed to have done. in fact they should have done it first. it is the basic responsibility of the on line monitoring group , the inspecting officers and the sanctioning authority . rbi's role comes in much later.

incidentally it will be interesting to know what exactly the terms of sanction of this lou facility to the company are . what are the securities ? what are the other conditions if any ? what is the time frame for completing the underlying transaction , viz imports ? or is it possible that this facility was never mentioned in the credit reports submitted to the sanctg authy and therefore never sanctioned by an appropriate authy ? 

most glaring omission however is that this lou facility was kept outside core banking solution platform . is it the case that non fund based facilities are not enabled in cbs ? or is it that only lou are outside cbs ? for technical issues ? or other considerations ?

most surprising thing however is that the ho probably had no means to know of transactions done out side cbs . given the fact the every bank had a system of getting regular reports of transactions done outside cbs . and if pnb was an exception that needs to be explained

   pnb  branch

let us come further down ,to the branch . isn't there a way for the branch in charge to know what facilities are being enjoyed by one of the biggest loan customers of the branch ? isn't it his duty to send credit reports to higher authorities for sanction? and to ensure that terms and conditions of sanction are adhered to ?

just as a test case will the branch in charge reveal how many times he visited the unit , inspected the stock ? or reviewed the stock inspection reports of his juniors ? and whether he ever noticed any comment regarding imported goods being stored separately ? or not found at all ?

are we to believe that br in charge never knew of the swift messages ? and that he has never heard of lou ?  lou originating from his branch

   govt 


let us go up now to the topmost layer , the govt. i deliberately kept it for the last as it is the most difficult stake holder to handle. it is that part of the sky where unprofessional lies fly around. for example note that this fraud originated in 2011. this lou which devolved on the bank in early 2018 had its origin in 2011 . this lou which was issued for a period of one year fraudulently , as against the normal validity period of 90 days, dates back to 2011 !

 then the silence on the claim by a whistle blower that he sent an alert in 2016. then the explanation that in international meetings anyone can barge into the group photos with the pm and that it doesn't imply anything . and the unexplained coincidence that every one of the big enough defaulters left the country just in time to dodge the law enforcement agencies of this country.

and the declaration that no loan which could turn npa was sanctioned after his govt assumed office . and most interestingly the stubborn silence since then. and probably his vow not to break it on mundane things like a bank fraud of a few thousand crores.


   media

finally a word on the media . they are the people who give us stories. they paint it in choicest colours.

initial breaking news was that it originated in 2011 . and we waited for the links to  nehru or at least his family .

then came the expert opinion that one year validity of the lou is what the fraud is all about . had it been the normally permitted 90 days nothing would have happened .

then the story broke that a manager sitting at his desk for unduly long period managed it solo . using his swift password. and understandably nothing else.

waiting for more breakneck news


   conclusion  

 pnb fraud is astounding . as usual system failure is evident. but the whole thing may end with the crucifixion of a manager or two . as usual .

 and that in brief is the biggest malady banking industry is facing . nay, the country is facing . the country has been facing . the country is likely to face for ever .

ഞാനൊന്നു കുളിക്കാൻ പോണു.....നീ നിന്റെ വീട്ടിൽ പോ ചെക്കാ

ഞാനൊന്നു കുളിക്കാൻ പോണു കൂടെ പോന്നോ ചെക്കാ നീ
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
തോട്ടിനപ്പുറം പാടത്തു മേയുന്ന പോത്തുകുത്താതെ നോക്കണ്ടേ

ആടിനെ തീറ്റാൻ പോണുണ്ട് ചെക്കാ നീയും കൂടെ പോന്നോളൂ
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
എന്റെയുള്ളം കാലിൽ മുള്ളു കൊള്ളുന്നെങ്കിൽ ഊരിയെടുക്കാനാരുണ്ട്

ഇന്നു ഞാൻ പോണതലക്കാനാണ് കൂടെ പോന്നോ വേണേല്
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
വൈകിട്ടു പെയ്യും മഴയത്തു കുഞ്ഞു വാഴയില വെട്ടി ചൂടണ്ടേ

വിളക്കു വയ്ക്കുവാൻ നേരമായ് ചെക്കാ മുറ്റത്തടുത്തായി നിന്നോളൂ
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
കാറ്റു വന്നു വിളക്കു കെടുത്തും നേരത്തു നോക്കാനാരുണ്ട്

നല്ല പുളിയിട്ട മീൻ കറിയുണ്ട് അപ്പുറത്തേക്കു നീ വന്നോളൂ
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
മീൻ തല മുള്ളിന്റ കൂടെ പെറുക്കി പട്ടിക്കു നമ്മൾ കൊടുക്കണ്ടേ

ഞാനൊന്നു മുറ്റത്തിരിക്കാൻ പോണു നീ നിന്റെ വീട്ടിൽ പോ ചെക്കാ
എന്തിനതെന്തിനെടീ പെണ്ണേ എന്തിനതെന്തിനെടീ
കാലത്തെ നേരത്തെഴുന്നേറ്റു വന്ന് കാണണ്ടേ നിനക്കെന്റ കണി

rafale deal ... a little more clarity please

rafale deal can benefit from a little more info from the govt.

1. apparently referring to the question why hal was dropped in favour of reliance group company , minister replies that no indian offset partner has been selected by the vendor ( dassault aviation ) so far.

but foundation stone for dassault reliance aerospace limited manufacturing facility in midhun nagpur was laid on 27 oct 2017 . that press release mentions that the facility will manufacture several components of the offset obligation connected to the purchase of 36 rafale fighters from france, signed between the two govts in sept 2016.

2. this deal is better reiterates the defence minister. but no details. or answers . here are the questions again .

i. how is the present price of 1600 cr per plane better than the 500 cr in the original plan or the escalated cost of 700 cr per plane ? ii. is exclusion of transfer of technology clause one of the betterment that the minister is referring to ?

3. minister says security agreement signed in 2008 forbids revealing details of the rafale deal (to be) signed in 2016.

will the govt specify the agreement ?

4. upa also refused to disclose details of defence deals, claims the minister.

upgrade costs of mirage 2000 aircraft were disclosed , explained and justified in reply to a parliament question in 2013, to cite one example .

5. revealing item wise costs will compromise our national security .

if this argument is taken forward, no govt will need to disclose defence purchase details ever. or the details of any deals . if this covenant is interpreted with a little imagination.

recapitalisation of banks

  
the second biggest thing in the 2018 budget of govt of india is probably re capitalisation of banks. let us stand up and clap. finance minister is an economist and a genius.
the first place of course goes to modi care . the program to raise health of every indian citizen to international standards. and maintain it at that level .
clap ? not yet . there will be opportunities galore . at least till the next general election. nothing is going to happen till then. this red moon will shine bright in the horizon well past the election festival. directing , inviting, cajoling people to the promised land filled with electronic voting machines.
let's come back to re capitalisation of banks. what exactly is the need ? simple. becoz the capital which it had went down the drain. not exactly . went into the leaky pockets of a handful of our countrymen. in neat loan packets of a few thousand crores of rupees each . by a mechanism rechristened by our finance minister a few months back , as 'balance sheet adjustments'. till then it was known by the name 'write off' .
where do these funds that go into recapitalisation of banks come from ? from the tax that we the malleable citizens of this country pay . one of the many uses of tax which we are aware of . there are quite a few which are in the secret domain.
aren't the banks collecting charges for withdrawing our own money ? yes. keeping money elsewhere is illegal. every transaction above a certain limit , rs 20,000 before the present budget, should be by way of bank cheques only. by cash is a crime. and to withdraw our own money from the bank we should pay penalty nick named processing charge, atm charge , transaction charge etc. ( minimum balance penalty is excluded for brevity. )
get all the money into the bank by force . appropriate a portion to the bank every time anyone takes his money out. great. but not enough to pull the banks out of the quagmire they are in , affectionately called npa , which in fact is nothing but forgone loans.
can this process of recapitalisation run for ever ? oh no. no need . we will sell off these public sector banks . after cleaning up the balance sheets by recapitalising a few more times. depending on how many chances we are likely to get in the govt.
will anyone bid for these banks ? sure enough , yes.  if they understand the monopoly chance lurking just a few years away. if planned and executed properly they can hope to have a monopoly of sorts in indian banking a few years from the sell off or let's call it the buy out.  and of course the fact that they will have to pay just a token price. after all it is the govt who is the seller.
so recapitalisation is just a small step in the long trip. hold the stand up clap. emulate the main opposition party . keep mum. or follow the leftist stalwarts. pretend to look the other way . come back with protests and processions when every thing is over.
grin and bear it . believe me. we can.