A couple of months ago, a young friend of mine was trying to remit a couple of thousand pounds to pay for her tuition and living expenses in the UK. She was given a run around for a whole day, and asked to produce documents starting from her birth certificate to current rent receipts. Yesterday the story of a scam involving $1.8 billion involving the Punjab National Bank and Nirav Modi broke. It is obviously much easier to spirit larger amounts with no documentation than a few thousand pounds against your own cash.
Apart from the obvious disproportionate intensity of scrutiny, should we not be asking why are banks and bankers so gullible and unable to learn any lessons from past mistakes. We are quick to blame politicians and then businessmen, but act as if banks and bankers are innocent victims of corrupt politics and greedy businessmen. Of course many of our politicians are corrupt and all businessmen are trained to be ambitious and greedy. But what about our bankers? Don’t they have any responsibility in such massive failures? Are they negligent, greedy or just plain stupid? Or all three?
In the early nineties, when the Harshad Mehta scam happened, it was spun out as an elaborate scheme planned and executed by one man and his family. He paid a heavy price for it, and there is nothing wrong with that. But what about the Reserve Bank and it’s outdated security settlement system that allowed this scam to thrive? What about the many banks which had no settlement reconciliation systems in place, and the many bankers who were either blind or stupid? They all pretty much got away scotfree, barring a few minions who were sacrificed by the ‘too big to jail’ bankers.
Then came Ketan Parekh. Another scam. Again a leaky system and a regulatory environment and banking network that was a fertile ground for milking the system. But when the proverbial shit hit the already dirty ceiling, we were bloodthirsty for Mr Ketan Parekh’s blood. But the regulators, the banks and the complicit bankers? All were poor innocent victims of one mans evil machinations.
Vijay Mallya? A crooked businessman who cheated innocent banks and bankers of a billion dollars. Who do we blame? Vijay Mallya of course. We want his blood. And politicians. We want their blood too. But what about the banks? Innocent bystanders who got duped. Who lends hundreds of crores to already broke and failing entities without asking some basic questions?
The entire trillion dollar NPA problem was caused by greedy businessmen and corrupt politicians as far as we are concerned. But the banks and bankers? Lily white innocent victims. Who need to be protected from businessmen and politicians.
And now Nirav Modi. $1.8 billion in unsecured foreign currency loans? No questions asked. But when my friend tries to pay for and send two thousand pounds to pay for her studies, they need everything in duplicates and triplicates. But when Mr Nirav Modi walks in and asks for $1.8 billion in unsecured loans, they hand him the keys to the vault.
But the banks are too big to fail and the bankers too big to jail.
Apart from the obvious disproportionate intensity of scrutiny, should we not be asking why are banks and bankers so gullible and unable to learn any lessons from past mistakes. We are quick to blame politicians and then businessmen, but act as if banks and bankers are innocent victims of corrupt politics and greedy businessmen. Of course many of our politicians are corrupt and all businessmen are trained to be ambitious and greedy. But what about our bankers? Don’t they have any responsibility in such massive failures? Are they negligent, greedy or just plain stupid? Or all three?
In the early nineties, when the Harshad Mehta scam happened, it was spun out as an elaborate scheme planned and executed by one man and his family. He paid a heavy price for it, and there is nothing wrong with that. But what about the Reserve Bank and it’s outdated security settlement system that allowed this scam to thrive? What about the many banks which had no settlement reconciliation systems in place, and the many bankers who were either blind or stupid? They all pretty much got away scotfree, barring a few minions who were sacrificed by the ‘too big to jail’ bankers.
Then came Ketan Parekh. Another scam. Again a leaky system and a regulatory environment and banking network that was a fertile ground for milking the system. But when the proverbial shit hit the already dirty ceiling, we were bloodthirsty for Mr Ketan Parekh’s blood. But the regulators, the banks and the complicit bankers? All were poor innocent victims of one mans evil machinations.
Vijay Mallya? A crooked businessman who cheated innocent banks and bankers of a billion dollars. Who do we blame? Vijay Mallya of course. We want his blood. And politicians. We want their blood too. But what about the banks? Innocent bystanders who got duped. Who lends hundreds of crores to already broke and failing entities without asking some basic questions?
The entire trillion dollar NPA problem was caused by greedy businessmen and corrupt politicians as far as we are concerned. But the banks and bankers? Lily white innocent victims. Who need to be protected from businessmen and politicians.
And now Nirav Modi. $1.8 billion in unsecured foreign currency loans? No questions asked. But when my friend tries to pay for and send two thousand pounds to pay for her studies, they need everything in duplicates and triplicates. But when Mr Nirav Modi walks in and asks for $1.8 billion in unsecured loans, they hand him the keys to the vault.
But the banks are too big to fail and the bankers too big to jail.
