Govt of India using adjudication bodies to "help out" corporate defaulters of banks: TU-civil society meet

By Our Representative
A joint meeting of civil society and trade union organizations has accused the Government of India of making frenzied attempts of pushing nationalized banks through Reserve Bank of India to take defaulting companies to the National Company Law Tribunal (NCLT), and start bankruptcy proceeding. This, the meet said, is a major reason for a sharp rise in non-performing assets (NPAs) of banks.
Providing an example, meet was told, Bhushan Power and Steel Ltd defaulted on Rs 37,248 crore, and now under the Insolvency and Bankruptcy Code (IBC), 2016 -- the insolvency and bankruptcy law -- Tata Power and JSW Steel Ltd have bid Rs 17,000 crore and Rs 11,000 crore to buy it up.
If the deal materializes, banks will lose over Rs 20,000 crore of public money and companies will just shake off their debt without any repercussion. Hence, the more companies are taken to NCLT, the more loss for banks. Especially smaller banks which unable to provide provisions will go bust, it was pointed out.
A quasi-judicial body that adjudicates issues relating to companies in India, NCLT was established under the Companies Act 2013 and was constituted on June 1, 2016. It consolidates corporate jurisdiction of the Company Law Board, Board for Industrial and Financial Reconstruction (BIFR), Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the powers relating to winding up or restructuring and other provisions, vested in High Courts.
Organized in Delhi by Act Now for Harmony & Democracy (ANHAD), All India Bank Officers' Confederation (AIBOC), Centre for Financial Accountability (CFA), Delhi Solidarity Group (DSG), National Alliance of People¹s Movements (NAPM), and New Trade Union Initiative (NTUI), the meet discussed on how the government is letting go wilful defaulters of bank scams.
The meeting was organised in the wake of recent spate of fraud unearthed at the Punjab National Bank, which "exposed" the crises and challenges being faced by public sector banks in general, and poor strategies of the government to deal with rising NPAs.
Among those who addressed the meeting included Gautam Modi, general secretary, NTUI; CPI(M) leader Nilotpal Basu; Anupam from Swaraj India; MK Venu, senior journalist with the "The Wire"; Mohan Guruswamy, policy analyst; Meera Nangia from Delhi University; and Moumita from AIBOC.
Pointing out that big corporations who owe 80% of NPAs go scot-free, speakers said, according to government data, between 2014 and 2017, in all 1,146 cases of fraud cases were registered where employees of public sector banks were involved. Another and 568 cases have been registered vis-a-vis private sector banks.
"The same data also shows that considering that 70% of market share is held by the public sector banks, and that fraud cases are more in private sector banks compared to their public counterpart", the meeting was told.
Speakers said, looking at only the scams would be myopic if we do not consider the ‘legal’ loot of public money -- the write-offs. Just in 2016 -17 alone public sector banks had written-off Rs 81,683 crore worth of bad loans. The Punjab National Bank alone had written-off Rs 9,205 crore.
It was also suggested that the recovery rates of loans in IBC have "not been encouraging", and in some cases banks only got 6% of the total loan. At the core of the problem lies in the fact that the larger the loan, lesser the security and collateral. Hence it is easier for big borrowers to get large loans from banks without much risk. This cavalier attitude has plummeted into a banking sector crisis.

Comments

Loktantra Bachao Abhiyan raises concerns over Jharkhand Adivasis' plight in Assam, BJP policies

By Our Representative The Loktantra Bachao Abhiyan (Save Democracy Campaign) has issued a pressing call to protect Adivasi rights in Jharkhand, highlighting serious concerns over the treatment of Jharkhandi Adivasis in Assam. During a press conference in Ranchi on November 9, representatives from Assam, Chhattisgarh, and Madhya Pradesh criticized the current approach of BJP-led governments in these states, arguing it has exacerbated Adivasi struggles for rights, land, and cultural preservation.

Promoting love or instilling hate and fear: Why is RSS seeking a meeting with Rahul Gandhi?

By Ram Puniyani* India's anti-colonial struggle was marked by a diverse range of social movements, one of the most significant being Hindu-Muslim unity and the emergence of a unified Indian identity among people of all religions. The nationalist, anti-colonial movement championed this unity, best embodied by Mahatma Gandhi, who ultimately gave his life for this cause. Gandhi once wrote, “The union that we want is not a patched-up thing but a union of hearts... Swaraj (self-rule) for India must be an impossible dream without an indissoluble union between the Hindus and Muslims of India. It must not be a mere truce... It must be a partnership between equals, each respecting the religion of the other.”

Right-arm fast bowler who helped West Indies shape arguably greatest Test team in cricket history

By Harsh Thakor* Malcolm Marshall redefined what it meant to be a right-arm fast bowler, challenging the traditional laws of biomechanics with his unique skill. As we remember his 25th death anniversary on November 4th, we reflect on the legacy he left behind after his untimely death from colon cancer. For a significant part of his career, Marshall was considered one of the fastest and most formidable bowlers in the world, helping to shape the West Indies into arguably the greatest Test team in cricket history.

Andhra team joins Gandhians to protest against 'bulldozer action' in Varanasi

By Rosamma Thomas* November 1 marked the 52nd day of the 100-day relay fast at the satyagraha site of Rajghat in Varanasi, seeking the restoration of the 12 acres of land to the Sarva Seva Sangh, the Gandhian organization that was evicted from the banks of the river. Twelve buildings were demolished as the site was abruptly taken over by the government after “bulldozer” action in August 2023, even as the matter was pending in court.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual.

Will Left victory in Sri Lanka deliver economic sovereignty plan, go beyond 'tired' IMF agenda?

By Atul Chandra, Vijay Prashad* On September 22, 2024, the Sri Lankan election authority announced that Anura Kumara Dissanayake of the Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) alliance won the presidential election. Dissanayake, who has been the leader of the left-wing JVP since 2014, defeated 37 other candidates, including the incumbent president Ranil Wickremesinghe of the United National Party (UNP) and his closest challenger Sajith Premadasa of the Samagi Jana Balawegaya.

Will Bangladesh go Egypt way, where military ruler is in power for a decade?

By Vijay Prashad* The day after former Bangladeshi Prime Minister Sheikh Hasina left Dhaka, I was on the phone with a friend who had spent some time on the streets that day. He told me about the atmosphere in Dhaka, how people with little previous political experience had joined in the large protests alongside the students—who seemed to be leading the agitation. I asked him about the political infrastructure of the students and about their political orientation. He said that the protests seemed well-organized and that the students had escalated their demands from an end to certain quotas for government jobs to an end to the government of Sheikh Hasina. Even hours before she left the country, it did not seem that this would be the outcome.

A Marxist intellectual who dwelt into complex areas of the Indian socio-political landscape

By Harsh Thakor* Professor Manoranjan Mohanty has been a dedicated advocate for human rights over five decades. His work as a scholar and activist has supported revolutionary democratic movements, navigating complex areas of the Indian socio-political landscape. His balanced, non-partisan approach to human rights and social justice has made his books essential resources for advocates of democracy.

Tributes paid to pioneer of Naxalism in Punjab, who 'dodged' police for 60 yrs

By Harsh Thakor* Jagjit Singh Sohal, known as Comrade Sharma, a pioneer of Naxalism in Punjab, passed away on October 20 at the age of 96. Committed to the Naxalite cause and a prominent Maoist leader, Sohal, who succeeded Charu Majumdar, played hide and seek with the police for almost six decades. He was cremated in Patiala.

Search This Blog