Banks In India Working With Responsibility?

Banking industry in our country  is very strong on fundamentals at a time, is now reaching close to lose the customer confidence.   Indian banking industry is nearing 50 years post nationalisation by the year 2019.  

Citizens of this country started moving towards inclusive growth by connecting themselves with banking industry thru Jandhan yojana and also by habituating to digital transactions.  This is the time banking sector and their boards have to be more responsible and play a vital role in growth of the nation.

But unfortunately the scams in banking sector  unearthed nearly to the tune of  50,000 crores approxmimately  to list some Vijay Mallya loot of 9000 crore ,  Nirav Modi’s PNB scam of 30000 crores( still counting) ,  Vikram Kothari’s scam of 3695 crores, Kanishk jain banking scam of 860 crores , Tottem group, Hyderabad’s latest scandal which includes a scam of 1365 croes to Union bank of India , On-Rock company is in the process of declaring insolvent to the tune of 3400 crores and no one knows how long the list will be near sooner.

Let’s try to introspect the series of bank scandals and why only now they are erupting like volcanoes?  Is it because the pressure and monitoring by Finance ministry or is it because the banking sector itself is totally sunk under its NPA’s due to political involvement?

Reserve Bank which has to monitor the functioning of the banking system in India is now almost accepting that it has limited or no role in controlling the banking functionality and also says that it can issue guidelines only. This means,  Over the years  banking sector is clearly working under the political leadership of the ruling party and played to the tunes of Finance minister of the day. 

The priorities of lending and collection of debts, recoveries are extremely favoured the political party of the day.  Banks have adopted a soft stand towards the friends and followers of the ruling party.  Banks have earned profits from the business that they have done from the masses of the country not from the big corporate sector that used the banks for their growth. 

Post demonetisation, and introduction of GST businesses are reeling under monetary crisis and money circulation has become tough.Income tax department’s regulations came into place and tracking of money has become easy and business under the influence of shell companies are coming out like rats in a hole of smoke.  

Parallel economy started weakening and genuine businesses are limping in the short term due to tightness of funds flow.  This situation has even creating negative impact on the growth and subsequently central government’s financial policies are coming under severe criticism by the opposition as well as business man on the street.

Few Bankers and their regulators added fuel to the fire with their negligence and favouritism to the people in power and spoiled the image of entire banking industry as well as nation.  It’s just a shame to say that few employees have used the loop holes in the banking system to make scam; no body admits this argument as without the support of the heads at the helm can dare to do such acts of omission.  

Government has to wake up the call and should initiate steps speedily not just only to recover the tax payer money but also see that mistakes are not happen again.  RBI should  bring in checks balances more strongly not be allowed to make hallow statements like that as common man may lose his confidence in the banking sector which is suicidal for the economy of the country.

By Raghu bhushan Eranki