Squandering of public money in banks by giving law a slip


While introducing the National Company Law Tribunal (NCLT) in 2017, BJP-led central government held that henceforth the banking industry would get advantage to recover the loans granted to the business houses quickly. According to the government, the cases of companies unable to pay back their debt would be brought to the aforesaid Tribunal by the bank authorities. They would be declared bankrupt and dues would be recovered by selling the companies’ properties. But now it is seen that such an assurance was far from truth.
SBI, IDBI Bank and some other financial institutions had advanced substantial loans to Videocon a known multi-brand corporate house, owned by industrialist Venugopal Dhoot. But now Videocon is a big defaulter of that loan. The total defaulted loan of Videocon is stated to be approximately Rs. 46,000 crores to this consortium of lenders. So, the Bank authorities went to the Tribunal to declare the corporate house bankrupt and wanted to recover the dues by selling its movable and immovable properties of Videocon. But now it is reported that Anil Agarwal, the owner of Vedanta Group, who hogged the headlines because of operating copper smelter plant at Sterlite’s Thoothukudi unit in Tamil Nadu causing severe pollution in the surrounding areas and posing serious health problems to the local inhabitants whose prolonged agitation ultimately led to closure of the plant, has expressed his desire to purchase Videocon at a price of Rs. 2,900 crores. Surprisingly, the lending banks and financial institutions have agreed to the proposal knowing fully well that the proposed takeover would cost them a loss of around Rs. 42,000. Another company, Shiva Industry took loan from IDBI Bank and some other financial institutions and is now a defaulter of around Rs 4863 crores of that loan. Shiva Industry now offers to repay just Rs 319 crore if the lending institutions agree to waive the balance amount. In this case also, the lending banks and financial institutions have given their consent to such an importunate wish incurring a loss of 93% of the dues.
This is how the banks are becoming weak as the corporate defaulters are escaping unscathed despite so called promises of confiscating the properties of theirs and paying back the dues of the lenders by selling those seized assets. Since introduction of NCLT in 2017, only 20% of the dues are stated to have been recovered. What a fuss and how the government is not only tight-lipped over such gross irregularities and glaring embezzlement of public money by the corporate sharks but is an indulgent onlooker to such ‘benevolence’ to the plunderers. It is due to these anti-people pro-corporate monetary and fiscal policies as well keeping the so called redressal mechanism only in books that the banking industry is in peril today and riding on the pretext of the banks becoming enfeebled, the government is going full throttle with privatization agenda.
Strongly condemning the entire episode, All India Bank Employees’ Unity Forum in a statement dated 22 June 2021 has called upon the bank employees and all section of the working people to come forward to resist this wanton squandering of public money by developing a powerful united movement. (source; Financial Express 09-06-21, Economic Times 09-06-21, ABP 21-06-21, Business Today-28-06-21)

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