Monday 26 February 2018

Random thoughts 20022018

#Randomthoughts It really feels wonderful to see the Prime minister of Canada and his lovely family touring India and attired in ethnic Indian dresses to places, wherever they visit. Particularly Mrs. Trudeau should be complimented for carrying off the Sari with such ease and grace. The children also look cute as do their father (ladies are actually drooling over him) . For the first time perhaps, we have a visiting head of country spending such longish quality time with the family in our country on an official visit and wearing so much of our Desi attire.

It's a pity therefore that his visit is not being highlighted by the establishment or the media to its due importance or necessary glitz. We have seen confirmed human rights abusers, tinpot dictators, ruthless fascists, mad-hatter jokers, obnoxious idiots, immoral cheats and even feudal Kings, Queens and Regents getting much more of fanfare and publicity during their visits to this land. So there is a bit of something that definitely stinks here.

Many commentators have linked this treatment, rather snub, to the Khalistani issue and as a quid pro quo. A whisper campaign is doing the rounds to project this diplomatic one-upmanship as an assertive statement. I don't have much idea of international diplomacy, but wonder what form of civility it is to call a person to your home as a guest, then snub him and furthermore gloat over it as a great achievement. At least I am not able to see either the merit or the funny side of it.

Random thoughts 25022018

#PNBfraud The Punjab National Bank MD Sunil Mehta has been reported to have given a most valuable input and earth shattering information about the fraud that has come out in the open. He has divulged that the scam was first detected by PNB officials at first in 2011 and they have reported it to the concerned agencies.

Now, this has made some people go delirious with joy for the simple reason that the genesis of the fraud can be linked and its responsibility fixed to the previous UPA regime. Let me first remind them that if the agencies under the UPA government can be blamed for sitting over the information for 3 years then they have also incubated this fraud-egg for 4 years, no less, under NDA. That should make them shut up and think, but probably I am too optimistic about their abilities to think and to understand. Be it a joke, a sarcasm or even a lesson.

Turning to the other mundane inferences from the information provided by the MD , it is clear that the top brass of the Bank and the auditors knew about the fraud at least the irregularities since 2011. Still, they suppressed the information from the public domain. That includes their depositors and shareholders. For seven years they withheld the information and behaved normally. Meanwhile, they continued to proceed with other normal (??) banking activities including increased exposure to the alleged fraudsters and other such people. In the passing, they picked up awards for the best vigilant bank or something like that.

I mean, come to think of it. The fraud has not been perpetrated by the Chokshi - Modi combine on the bank. But it is a fraud committed by the officers of the Bank on the whole nation. Tell me, how is this different from the Chit fund scams that we talk about so much.

PNB is a corporate entity, a listed company on the stock exchanges and has to make statutory declarations. For seven long years, it conspired silently against the interests of its shareholders. What about that? Was this fraud ever discussed in their Board meetings? What were the government appointees, workmen directors , and independent directors doing? Are these people selected to warm their fat arse during Board meetings?

All the past PNB MDs, Chief Vigilance Officers, Auditors and senior officers who aided and abetted this suppression of fact should be immediately arrested and proceeded against. I have myself worked in a Bank as an officer and also participated in union activities. But I do not support shielding of people responsible for corruption either due to corruption, suppression, indecision, negligence or plain stupidity. They should be identified, without fail. What action is taken against them is a matter to be dealt with under the extant law, rules, regulations, and policies.

I know many of my friends in the banking industry will feel surprised or hurt at my above comments. But I can't help. Any misplaced sense of loyalty can't keep me anymore oblivious to the complicity, implied or explicit of bankers to these financial frauds. Even if spitting upwards make it fall on my face, I have to say this.

And yes, it is not only the top brass, all bank employees have to bear the moral responsibility of such frauds. They can't crib, cry and shift the blame. They have to prove that their collective strength is not only for increasing their salary after every five years. They have failed in performing their duties to the nation by keeping silent or ignorant about these frauds. If they are not conspirators then they are idiots, they have to admit that. And, why should idiots be paid or hired?

Tuesday 20 February 2018

Random thoughts 21022017

#Randomthoughts It really feels wonderful to see the Prime minister of Canada and his lovely family touring India and attired in ethnic Indian dresses to places, wherever they visit. Particularly Mrs. Trudeau should be complimented for carrying off the Sari with such ease and grace. The children also look cute as do their father (ladies are actually drooling over him). For the first time perhaps, we have a visiting head of country spending such longish quality time with the family in our country on an official visit and wearing so much of our Desi attire.

It's a pity therefore that his visit is not being highlighted by the establishment or the media to its due importance or necessary glitz. We have seen confirmed human rights abusers, tinpot dictators, ruthless fascists, mad-hatter jokers, obnoxious idiots, immoral cheats and even feudal Kings, Queens and Regents getting much more of fanfare and publicity during their visits to this land. So there is a bit of something that definitely stinks here.

Many commentators have linked this treatment, rather snub , to the Khalistani issue and as a quid pro quo. A whisper campaign is doing the rounds to project this diplomatic one-upmanship as an assertive statement. I don't have much idea of international diplomacy, but wonder what form of civility it is to call a person to your home as a guest, then snub him and furthermore gloat over it as a great achievement. At least I am not able to see either the merit or the funny side of it.

Monday 19 February 2018

Anti nationalisation

With the unfolding of the fraud in PNB, there is a strident demand from some quarters that the PSU Banks be dismantled and the whole banking system be privatised. This is nothing new or unexpected. Personally, due to my association with banking for a long period, majority of the friends and acquaintances that I have acquired in my adult life are from the financial circles. And I find that a large number of them are amenable to the idea that nationalisation of the banks be reversed and banking should be treated like any other business based on the market forces of “Risk and Reward”, “Demand and Supply”, “Growth or Perish”, “Survival of the Fittest” and many such ideas that form the core of the capitalist doctrine. I fully agree to their contention about treating banking as a business but I am surprised with their stance on the privatisation of the nationalised banks.

Most of the PSU bank employees who have done well in life seem to be have suddenly become ardent supporters of the privatisation of the nationalised banks. From my personal analysis, I feel that one reason for such views may be totally selfish, though most would deny it in public. . These high performers within the PSU banks are under a notion that privatisation of banks will bring them higher salaries, bonuses and incentives at par with their counterparts in the private banks. I again do not have any issues with such line of thought. But can’t understand why should the nationalised banks be privatised to bring them material gains on a platter? If they want good money and higher standards of life, why don’t they break out of their safety net to join the private banks, compete and rise? Who stops them from doing this? This is the first lesson of the high pedestal of “Risk and Reward” which they should practice before they preach. If they are not leaving the PSU banks themselves, then why should they join the chorus for privatisation of PSU Banks? That is sheer laziness, I say, to expect that the rules will be changed in your favour just because you think that you deserve it. And if, they have tried and not got a suitable job in the private sector in spite of their efforts, they should clearly understand the bitter truth that they are not fit for the private sector and their interests are best served in the PSU setup itself.

Now let us take the people in the private banks that are supporting privatisation. By association, they should be expected to be against nationalised banks and champion of the free economy under the best traditions of capitalistic traditions. For all the glitch, glamour and high sounding words, for them this is actually nothing more than copying ideas from the USA and other developed economies, recycle them and try to get the best arbitrage from the information gap existing in a financially illiterate society at large. But I do not grudge them for this. They are entitled to their views, pursuit of hedonistic life and support for privatisation. As long as, they perform their job within the laws of the land. As long as, they do not ask for support from the government to bail them out by deploying the tax payer’s money. As long as, they do not expect government policies to be bent to suit their needs. And all this can be done by strengthening their own institutions. There is no need for privatisation of the nationalised banks for this. Why are they insecure about the PSU banks if they are efficient? The “Demand and Supply” theory should definitely take care of their needs. If people feel confident enough to put their deposits with them, they will surely have access to funds.  Do I sound illogical here? Correct me if I do.

Then there are the other category of people who due to their political affiliations, antipathy to socialism, warped world view, ignorance or plain dumb stupidity lend their high pitch and shrill voice to the chorus of “Privatise the banks to stop frauds and scams “. If a frank anonymous survey is taken then it will be found that most of these people also blame women wearing short dresses and moving with their boyfriends in public as the major reason for rapes happening. These people will never go deep into the malaise that afflicts the PSU banks, the raison d’être of their existence and the relevance of their continuation for a country like India. A major reason for the views expressed by them is because it is shaped by a constant brainwashing by the purveyors of neo liberal capitalism since the last few decades. Sadly, this section of people will see no logic and wallow in their perverse obsession of dismantling the PSU structure totally just because they hate a particular person or a family, who they believe (wrongly and foolishly) for the sole reason of all the woes. So there is no reason to waste energy by rebutting these people with logic or rationale.

Before getting carried away with the orchestrated chorus of “Down with PSU Banks” let us understand why the Banks were nationalised in the first place and what has been the achievement since then. The prime objective behind the Nationalization of Banks was to ensure money supply to the economy for equitable and inclusive growth cutting across sections of the society irrespective of geography. It freed the rural population from the clutches of moneylenders, provided security to depositors, ensured distribution of wealth, facilitated easier access of credit and most importantly freed the banking system from the hold of feudal class.  The rapid spread of banking to the remotest part of the country which serves as the backbone for the financial infrastructure that we presently use and take for granted would never have been possible without the nationalisation of the Banks. That the whole financial system has been able to withstand major crises is a testimony to the efficacy of the system.  Job creation and livelihood sustenance for the poor, marginalised and differentiated segments of the society has been a major achievement of the nationalisation of banks. One may try as much they want to but it can never be denied that nationalised banks have been the base and its employees have also been at the forefront of the war that has liberated millions of Indians from the clutches of hunger, penury and joblessness.

That the Indian society is still mired in a feudal mindset and the usurious money lenders have not been eliminated completely from the system is not a sign of weakness but rather points out to the relevance of the of Nationalised banks. Chit fund scams that regularly happen are a reminder to what could have happened if the PSU banking system were not in place.

The problem that besets the PSU banking system, as I see it is because the basics have been ignored, both of nationalisation and privatisation.  Both the PSU banks and the Private Banks can co exist in the system which is large enough to accommodate them. The only thing is that they should not work at cross purpose. Let the nationalised banks garner deposits from the people of the country, keep it safe and lend it to the Agiculture, SME, PSU corporate and State funded schemes. Why should the nationalised banks lend to the Private sector and put the common people’s money at risk. The private sector can borrow from the private banks or raise capital by selling shares or the debt market. There is no need to support them with the PSU funds. Will that be acceptable to the great supporters of free market? How many Indian companies can run for fifteen days without the Cash credit loans granted to them by the PSU banks? This is actually the crux of the problem. Crony capitalists and their supporters basically want to access cheap funds and take advantage of the PSU setup to divert, siphon and loot through corruption and malpractices.  Can someone explain why PSU banks should fund activities like diamond business, Entertainment, realty etc. And why should they venture into merchant banking activities at all? The private banks can take risks and reap the rewards.  Why should the PSU banks take risks which are not aligned to the basic objectives or raison d’être of their existence?  Why should the PSU resources be used to be squandered away and utilised to increase the wealth of the 10% of the population?

We are all aware about how the PSU Banks have been abused by the political class. We all know how corruption prevails in the setup. But that doesn’t serve as logic to conclude that the panacea for all this malaise is to dismantle the PSU banks. If somebody has a headache, do we cut off the head? Then by the same logic, why do we hold over Kashmir? I know, the anti-nationalisation brigade will start the chant of “anti-national” at me now, saying indignantly (faked) - how can both issues be even linked.  But then logic and rationale were never the strong points of those who believe in hype and propaganda.

I would rather suggest everyone to beware of these people who are talking about the dismantling of PSU banks and privatization of the Nationalised banks because these are the fifth columnists, the Trojan horses of the global capitalist system which wants to destroy the framework of public expenditure in this country by their machinations. Most of these people who are advocating for the dismantling of the PSU system either have a half-baked idea about economics or they are plainly stupid enough not to realise that in a country like India It  will only bring in chaos and give total control of the economy to oligarchs.