India’s biggest lender, State Bank of India has reported 1,069 loan fraud cases in the last five financial years but has not disclosed the amount. That is the magnitude of “accepted failure” in SBI under the Chairmanship of Arundhati Bhattacharya. That is perhaps why she wanted to decriminalize the NPAs so that the likes of Vijay Mallya, Nirav Modi and Mehul Choksi could lead their luxurious life at the expense of a common man.

After PNB, Bank of Baroda had the highest amount of loan frauds reported, with 44.73 billion rupees from 389 cases. Bank of India ranked third, with loan frauds totaling 40.5 billion rupees from 231 cases.

It is high time Government came down heavily on this organized loot and prosecuted the higher ups in the hierarchy rather than making a scapegoat of ordinary foot soldiers.

Categorical Statement by whistleblower Dinesh Dubey on TV explaining how Nirav Modi and Mehul Choksi were helped by the entire Board of Allahabad Bank in 2012-2013 leaves no doubt that the same drama must have been enacted in other Banks at the highest level.

Dinesh Dubey was the nominee director appointed by the UPA Government on the Board of Allahabad Bank. He had objected to the renewal of loans given to Mehul Choksi and Nirav Modi. His dissent note was not considered by the Board of the Allahabad Bank.

Dinesh Dubey had written to then RBI Dy. Governor Chakravarty. Except praising Dubey for his alertness, the then Dy. Governor Chakravarty did precious little to stop this loan. Role of then RBI Governor Raghuram Rajan also needs to be probed. The man is conspicuous by his silence in this matter. The RBI also had its nominee Mr. Udgatha as Director on the Board. His reaction to the objections raised by Dinesh Dubey that such sanctions/disbursement do happen in rare cases are equally shocking.

His charge against then Finance Secretary Takru that he forced him to resign as there was pressure from above is a testimony of involvement of powerful in this scam.

This clearly shows the entire system was smoothly working to the advantage of scamster/ fraudster Nirav Modi and Mehul Choksi.

Who were the higher ups who could influence the Finance Secretary?

Was it Finance Minister Chidambaram? Or PM Dr Manmohan Singh? Or INC President and then de facto PM Sonia Gandhi?  Or Rahul Gandhi who had reportedly inaugurated Nirav Modi’s Delhi show room one day earlier? Or someone from the powerful coterie of Sonia Gandhi such as Ahmed Patel?

Even as the Congress targeted PM Modi for being pictured at the World Economic Forum 2018 in Davos, Switzerland, Congress rebel and Rahul Gandhi baiter Shehzad Poonawalla alleged that the Congress President had attended Nirav Modi’s event in 2013:

#PNBScam began with fraudulent LoUs & transactions which began in 2011 – Just FYI: Rahul Gandhi was spotted at Nirav Modi events – did not know he had interest in bridal jewelry – 2013 Imperial Hotel event in Delhi. SCAM began in 2011- should find out Nirav’s political links https://t.co/SfbIQyIosS

— Shehzad Jai Hind (@Shehzad_Ind) February 15, 2018

Challenge to @OfficeOfRG – was he not at Nirav Modi’s event in Delhi’s Imperial Hotel in 2013-SPG details will leave no doubt if made public- #PNBScam started in 2011;Nirav hobnobs with Rahul (whose govt in power) in 2013 ;Rahul had interest in women’s jewelry? Or something else https://t.co/kbg9U8Hr7i

— Shehzad Jai Hind (@Shehzad_Ind) February 15, 2018

A thorough, sincere and time bound investigation should reveal the brain and the collaborators in this fraud. This cannot be the brain of a mid-level Deputy Manager like Gokulnath Shetty or Kharat.

The exposure of various banks is:

Allahabad Bank: Rs. 4,000 crore

Union Bank: Rs. 2,300 crore

Axis Bank: Rs. 2,000 crore

SBI: Rs.960 crore

BOI: Rs.300 crore.

Total: Rs. 9,560 crore.

Raids on premises of Nirav Modi and Mehul Choksi yielded recovery of 294 fake LOUs and 224 fake LCs.

It is said that the magnitude of fraud is around Rs. 35,000 crore and not Rs. 11,100 crore as is made out to be. Republic TV is carrying out expose in this regard.

So far, only 18 PNB officials are suspended. No one has yet been arrested.

No action has so far been initiated against the members of the Allahabad Bank Board, the then Finance Secretary Rajesh Takru, then Dy. Governor of RBI Chakravarty, RBI Governor Raghuram Rajan for acting as a moot spectator to this loot.

No investigation has been ordered into other Banks mentioned above.

Who was that higher authority that was forcing Finance Secretary Takru to silence the dissent towards disbursement of loans to Nirav Modi and Mehul Choksi team? It does not require much of intelligence to infer that similar influence must have been exerted on the Boards of other Banks. If not, they were clearly in cahoot with the fraudsters.

If one applies for vehicle loan, the Banks cross check the proforma invoice with the dealer. In this case, no such cross verification that is known as ‘confirmation’ in banking parlance, was done by any of these Banks lending money on the basis of LOUs/LCs of PNB is difficult to digest. This cannot be brushed aside as mere failure – systemic or systematic.

In a FICCI session that was held in Kolkata on July 10, 2017, Arundhati Bhattacharya, Chairman of State Bank of India made a jaw-dropping remark justifying emergence of NPAs: “In India NPA is treated as criminal, which it should not be. There is no permission for failures. Permission to fail is not given by the society. But failures will take place.”

In its RTI request, Reuters sought data from 20 of India’s 21 state-run lenders and obtained 15 replies.

PNB topped the list with 389 cases totaling 65.62 billion rupees ($1.03 billion) over the last five financial years, in terms of the total amounts involved. Reuters was unable to obtain a detailed breakdown on the exact nature and method of the loan frauds the banks reported to RBI over the last five financial years.

After PNB, Bank of Baroda had the highest amount of loan frauds reported, with 44.73 billion rupees from 389 cases. Bank of India ranked third, with loan frauds totaling 40.5 billion rupees from 231 cases.

India’s biggest lender, State Bank of India has reported 1,069 loan fraud cases in the last five financial years but has not disclosed the amount. That is the magnitude of “accepted failure” in SBI under the Chairmanship of Arundhati Bhattacharya.

That is perhaps why she wanted to decriminalize the NPAs so that the likes of Vijay Mallya, Nirav Modi and Mehul Choksi could lead their luxurious life at the expense of a common man. And SBI has mastered that skill. SBI has already recovered Rs. 1,772 crore from small depositors in the form of penal charges for not maintaining minimum balance in their savings account during the period April 2017 to November 2017. Tax the poor to pay for the Failure.

It is high time Government came down heavily on this organized loot and prosecuted the higher ups in the hierarchy rather than making a scapegoat of ordinary foot soldiers.

(The author is a Chartered Accountant based in Mumbai, India)