Bank­ing Blues

Alive - - Letters -

Till the other day these new gen­er­a­tion Banks were ad­ver­tised as greater than RBI and SBI in “mod­ern in­no­va­tive prac­tises.” Now that bub­ble is pricked.

Smt. Chanda Kochhar as­cen­dancy to the cov­eted post to ICICI, a lead­ing pri­vate sec­tor bank was widely wel­comed by the peo­ple in­side and out­side the coun­try for her acu­men and in­depth knowl­edge of bank­ing op­er­a­tions. Till some­time be­fore the news do­ing rounds of her in­volve­ment in scam re­lat­ing to dis­bur­sal of loan amount­ing to thou­sands of crores to her hus­band on roll of Video­con with­out ini­ti­at­ing proper ac­count­ing process, she was ac­tively known as a no non- sense banker and pos­sess­ing skills ca­pa­ble to take ICICI to greater heights.

It was al­leged that a com­pany re­lated to Video­con group chair­man Venu­gopal Dhoot in­vested Rs 64 crore in NuPower in 2010 and later, the pro­pri­etor­ship of the com­pany was trans­ferred to a trust owned by Mr. Kochhar for Rs 9 lakh af­ter the Video­con Group re­ceived a loan of Rs 3250 crore from ICICI Bank in 2012. The scam in ICICI fol­lowed close on the heels of scams un­earthed in public sec­tor banks re­minds of an old aged adage. If win­ter comes, can spring be far be­hind. No doubt, the bank­ing sys­tem which earned the rep­u­ta­tion” good to bank with” now seems do­ing away with and of late earn­ing the ep­i­thet oth­er­wise and scams started to set in and rot­ting the bank­ing sys­tem on ac­count of sev­eral dis­crep­an­cies and loop­holes in the sys­tem.

The scams ir­re­vo­ca­bly in­vite a thor­ough probe at var­i­ous lev­els to stem the re­cur­ring losses and in­creas­ing NPA’s to bring the sys­tem on right track and win­ning the good­will of the cus­tomers they held erst­while. The mas­ter banker, RBI, can be roped into bring leg­is­la­tion in this re­gard as it has been do­ing long since. The RBI needs to put things in right per­spec­tive by de­vel­op­ing a sys­tem with mul­ti­ple checks in phased man­ner be­fore dis­burs­ing hefty loan to the peo­ple and ini­ti­at­ing a check of their cre­den­tials. The re­forms in bank­ing sys­tem is long awaited and there is need to re­place the age old flawed laws to make it more cus­tomer friendly to reim­pose the faith in cus­tomers and to make the sys­tem more and more mean­ing­ful stand­ing to the cause to serve both the rich and the poor.

Un­til re­serve Bank of In­dia is in­tro­duc­ing “cred de­fense” like “fraud de­tec­tion plat­form” with “fin­ger vein recog­ni­tion” sys­tem in all branches of na­tion­alised banks in­clud­ing ICICI Bank like pri­vate banks on the ba­sis of cloud ser­vices by track­ing on-site ac­tiv­i­ties, mon­i­tored by “in­tel­li­gent video an­a­lyt­ics tech­nolo­gies” on the ac­ces­si­ble lo­ca­tions at ATMs and bank branches, all over in In­dian and over­seas branches of In­dian banks, world­wide.

Strange sit­u­a­tion in the pri­vate sec­tor too which came to view. Whether it is a paid’ leave or a gar­den’ leave? In pri­vate sec­tors, even a one per­cent down in div­i­dend, the Share hold­ers raise hue and cry. But in this case, all are mum; raises doubts - all in the loop? There is no one to stop cor­rup­tion at the early stage or find out a fool­proof sys­tem to con­trol and look into the loop­holes in the func­tion­ing key depart­ment of the bank.

— CK Subramaniam

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