The Modi Govt Used Ordinary Indians' Money to Square the Accounts of Wilful Defaulters, Fraudsters https://thewire.in/banking/the-modi-govt-used-ordinary-indians-money-to-square-the-accounts-of-wilful-defaulters-fraudsters Jawhar Sircar 04/Aug/2023
if we assume 2% of endangered loans as the “international standard”, this percentage is so much higher in India. We submit that this was due to fraud, collusion, or abject misuse of bank loans and since nothing comes free some people were paid to “routinise losses”. Thus, when NPAs reached 11.46% of total loans in Modi’s India, some 9.46% (i.e., the percentage above 2) either went to line pockets, while maybe a fraction of this reflected the ‘constraints’ in our banking system.
It is, of course, a fact that the upward movement of NPA percentages picked up towards the end of the United Progressive Alliance government’s years. But it was still below 3%, going up to 4% in the last year. There may have been some cases of reckless lending towards the end, but Modi had nine full years to scrutinise, stabilise, and exit bad loans. Instead, bad loans doubled and tripled in his time, with bank frauds committed by his known businessmen shooting through the roof.
The government claims that banks indulge in this final write-offs “to clean up their balance sheets, avail tax benefits and optimise capital” as directed by RBI.. the losses are not made by the government but by ordinary bank customers – whose money lying with banks is “adjusted” to cover up losses caused by racketeers and asset-suckers.
A section of defaulting (or embezzling) businessmen gain from these de facto waivers called write-offs, as the heat on their backs would be less. Those big sharks who finance any ‘helpful’ political party can handle their matter quite neatly with precise “corporate organisation” and leave no trails of messy cash handling and fund transfers.
https://thewire.in/business/modi-government-npas-loans-write-off-12-lakh-crore
https://thewire.in/economy/the-modi-government-must-answer-for-indias-historic-bank-loss-of-rs-12-lakh-crore