Crack whip on fraudsters

Burdened with nearly `1 lakh crores in bad debts, the public sector banks breathed a sigh of relief on Tuesday as the Reserve Bank agreed to extend the stiff capital conservation buffer completion by a year. The CCB is an additional hedge against risks. This was an exigent need and is estimated to reduce the burden of stressed banks by around

`35,000 crores this fiscal. Flush with this liquidity, banks will hopefully tilt in favour of the medium, small and micro sectors while keeping due diligence. That this was done only after an unseemly public row shows the lack of statesmanship and signs of immaturity on the part of both the government and the central bank. The government, already strapped for funds, will now benefit as its contribution towards bridging the capital shortage in stressed PSUs will be reduced. Hopefully, the government will not squander this on non-productive schemes like statues.

The equally pressing problems of dealing with fraudsters is yet to be tackled. The government’s own data shows that there were over 8,670 fraud cases totalling `6,12,600 crores over the past five years, upto March

31, 2017. Former RBI governor Raghuram Rajan had given the government a list of high-profile fraud cases after he had set up a fraud monitoring cell. It is disconcerting that Prime Minister Narendra Modi, who had said he would not be corrupt, nor allow others to be corrupt, is shielding these fraudsters by not revealing their names. The efforts of the government and the RBI to save the PSUs would become irrelevant if these fraudsters are allowed to bleed the system.