Banks, merger of banks
As reported in The Wire, banks have written off Rs 14.56 lakh crore between 2014-15 and 2022-23. The share of large industries and services in the written-off amount is Rs 7,40,968 crore or 48.36%. The amount recovered during the period is a mere Rs 2.05 lakh crore or. 14.07% of the write-offs.
The simple question arising out of these figures is, who pays for the remaining amount of 86% of unrecovered write-offs? It is the respective banks that ultimately bear the burden and this is precisely the reason why banks had to book the losses amounting to Rs 2,07,329 crore successively for five years from 2015-16 to 2019-20.
Even though borrowers continue to be liable for repayment, in practice banks are compelled to forgo any hope of recovery. Thus, in practice, a write-off becomes not only a waiver but a sort of debt relief to the borrowers in which predominantly corporates have a major share. This is shown by how NPAs have been brought down over the last few years.
Mergers of public sector banks benefited corporates
This was the period during which the government resorted to ‘consolidation’ of public sector banks (PSBs). Thus the number of public sector banks has gone down from 27 to 12. As a sequel effect, large-scale closure of the branches of merged entities has taken place, putting customers, especially senior citizens and the poor, in their command areas through unnecessary inconvenience. This consolidation was neither demanded by the customers nor by the shareholders, nor by the employees. As was being argued by the government and some academicians, this was proposed to help reduce administrative costs, increase risk appetite, provide better capitalisation etc. But the same now has proved to be an alibi. Rather, bank consolidation and the formation of bigger entities help corporate borrowers raise finances from a single financial institution. Banks have to adhere to RBI’s stipulated group-specific exposure limit, which refers to the maximum loan as a percentage of its capital base that a bank can offer to a specific business client. Since mergers increase the capital base of the new entity, they allow corporate lenders to seek loans from a lesser number of banks rather than approach many financial institutions to raise money.
31/10/2023
बैंकों के साथ फ्रॉड करने वाले Wilful Defaulter को फिर से मिल सकेगा कर्ज? https://www.youtube.com/watch?v=eLFbcjJhrFI The Wire
Jun 18, 2023 जानबूझकर कर्ज न चुकाने वालों यानी wilful defaulter पर आरबीआई ने एक सर्कुलर जारी किया है। इस सर्कुलर के मुताबिक जिन लोगों या कंपनियों ने बैंकों से या किसी फाइनेंसियल यूनिट से कर्ज लिया है। कर्ज चुकाने की हैसियत में थे, मगर जानबूझकर कर्ज नहीं चुकाया। यानी जो विलफुल डिफॉल्टर हैं। वह बैंको के साथ कर्ज पर सेटलमेंट कर सकते हैं। एक तरह से समझ जाए तो कर्ज को राइट ऑफ किया जा सकता है। सेटलमेंट होने के 12 महीने के बाद वह फिर से बैंको से कर्ज ले सकते हैं। वैसे खाताधारी जिनके कर्ज के खाते को धोखाधड़ी के खातों के तौर पर चिन्हित किया गया है। यानी बैंक के साथ धोखाधड़ी करने वाले भी अगर आज सेटलमेंट कर लेते हैं तो 12 महीने बाद कर्ज लेने के हकदार बन जाएंगे. इन सबके बीच में अगर किसी विलफुल डिफॉल्टर पर क्रिमिनल केस भी चल रहा हो तो वह भी आड़े नहीं आएगा। Wilful defaulter से जुड़े इन्हीं सारे मुद्दों पर इस वीडियो में बात की गई है।
Systematically killing public Sector Banks – Pushing away people to money sharks https://www.cenfa.org/systematically-killing-public-sector-banks/ Thomas Franco
Public sector banks are marginalised, and understaffed and people complain of poor service and shift to private banks and non-banking companies where the interest rate for loans is much higher. This has increased inequality to its highest level...
PSBs were forced to open 97.3% of the Jan Dhan accounts, whereas private banks opened only 2.7% of them.
PSBs have opened 15675442 Atal Pension Yojana accounts (91%) as of 31/3/20 where while PVBs have opened just 1562997 A/Cs (9%).
PSBs have been forced to lend more to NBFCs in spite of those failing. They get loans at around 10% interest but lend at 24% or more. The business is shifting to NBFCs, as seen in the RBI Report. They depended on borrowing from and lending only to lucrative businesses.
Post by Sushila
Joshimath Disaster: An inevitable result of long neglect of scientific warnings, of gross financialization of nature and total lack of Environmental and Social Safeguard Policies!
It is a story of a disaster foretold decades ago and yet the government, ministries, financial institutions and public sector enterprise all have failed to pay heed to experts!
NTPC has raised hundreds of crores through issue of bonds by showing the Tapovan - Vishnugarh project as one of the ‘securities’. LIC, Central Bank of India, Punjab National Bank, Union Bank of India, Indian Overseas Bank are some of the institutional lenders to these bonds. This is not just with this one project, as of March 2017, long-term loan borrowing of NHPC stood at Rs. 17,246 crores which includes secured loans. The secured loans include borrowings from domestic banks and financial institutions like State Bank of India, Indian Overseas Bank, ICICI Bank Limited, Jammu & Kashmir Bank Limited, Bank of India, Axis Bank, State Bank of Patiala, State Bank of Bikaner & Jaipur, HDFC Bank, IndusInd Bank, Bank of Baroda, Central Bank of India, Kotak Mahindra Bank, RBL Bank, Life Insurance Corporation, Power Finance Corporation, and Rural Electrification Corporation. Not a single one of these institutions have an environment and safeguard policy with accountability mechanisms!
WA post: secured loans means not mandatory to return back Secured loans means they have a collateral to fall back on in case of default.
JD: No Trump! Just the Aces and Kings and Queen Rule. the PMLA act will give the banks some less than 50% of their principal. That's security in the name of Development...and ease of doing business..
How are we aggrieved by Bank Loan write offs? https://youtube.com/embed/DHho_kpaZS8?start=942&end=1024 This is a 10 min segment of .. India's New Age Bank Robbers | Why are Banks silent about the Loot? | Akash Banerjee & Manjul The Deshbhakt Dec 24, 2022 In an admission in Parliament the Finance Ministry has revealed that just the TOP 50 wilful loan defaulters in India owe banks close to 1,00,000 CORE RUPEES! - Another RTI shows that just 300 defaulters who owe banks more than 100 core each - have a cumulative loan default of 1.4 LAKH CRORE RUPPES. Who sanctioned these loans ? How were these bad loan processed ? Why are rules only enforced when a middle class Indian or a farmer comes to ask for the loan? Why is the recovery process different for different people ? Why is the law so radically different for rich and poor (even when the rich default?)
- Ordinary Indians' Money to Square the Accounts of Wilful Defaulters, Fraudsters
- Insurance Uncovered
- Performance of Public Sector Banks
- Demand to Reverse the SBI-Adani Capital Deal by Peoples' Commission on Public Sector and Public Services
- Kanungo Committee Has Practical Suggestions for Bank Customers