A teardrop in the eyes of the average person is now a piece of cake for high-profile people in the corporates.
The last month’s NCLT order is very much welcome for the corporates and their investors as it resolute the long-pending cases for Bank craft and insolvency for many bad debt cases.
As per the new order from the Mumbai Bench of the National Company Law Tribunal, banks will now have to take a ₹42,000-crore haircut after approved a bid by Anil Agarwal-backed Twin Star Technologies’ to acquire Videocon Industries Ltd for only ₹2,900 crores, while the total Claim was worth ₹46,000 crores. It all started in December 2017 under the insolvency code.
If we follow the order of the NCLT not only the Videocon case which settled for 2884Cr against a loan amount of 59132 Cr,but also many such cases including Reliance Infratel 41055 Cr loan settled for 4235Cr only!! almost 90-95% bank’s’ money just vanished in such orders out of 10 defaulter cases. Now Banks will have to live with the fact that their investment is under “bad debt written off” in their books of account. See the Original Order for another such case Corporate Debtor, Dewan Housing Finance Limited (DHFL) here.
But this is a month-old issue and why we are raising this now?
Well, the issue raised by Mr. Raja Mukhopadhay National Observer of Hindu Mahasabha in a different context. He explained how central government and agencies has created a pain point for all retail banking users by giving holidays to corporates and friends under doubtful pretext and assumptions.
He further adds when a pandemic is showing its tooth and nail, over the people and countries finance, Banks and financial institutes are leaving no stone unturned to recover interest and NPAs from individuals and small MSME sectors as they need to recover the lost assets in NCLT arena, which is creating cash flow crisis in day-to-day life. Even some have stopped functioning or amounting to deep depression in the mental health of the country. An indirect loss of jobs and scope for future stable return chances.
Just to substantiate the argument one such example, a private Bank ICICI gave 12.66 Lakh Rupees Hone Loan, got 15.5 Lakhs as return by installments and then the man failed to pay the loan because of lost job financial crisis, etc., Bank auctioned his house in 30 Lakh and took the entire amount as recovery. So he lost almost 46 Lakhs Rupees for 12.66 Lakh of Loan and now stands homeless. This story was just before Pandemic and the same is continuing for all retail products of the Banks.
|Company Name||Loan Amount||Settled Amount||Hair Cut (%) for Banks|
Banks are sending customer data of the defaulter to 3rd party agencies, which is a breach of confidentiality of the data and becomes a life threat for people most times, as personal data is not safe.
So, Raja Mukhopadhay of Hindu MahaSabha requests the central government of India to look into the people’s issues and help them on the ground, not in papers only. Please check who are the people really getting the loans allotted for MSME, Mudra Scheme, and so on.
Financial mismanagement is not visible to everyone, but the undercurrent is getting so strong, that despite the government’s good intentions and supportive attitude, some nexus in the system will churn out the benefits at the cost of the people.
Mr. Raja also added that if we do not do a ground reshuffle in revenue intelligence and fiscal health check, subsidies are going to hit hard the country. Which could lead to the collapse of the entire economy in near future.
GDP is growing, but fiscal management is worrying experts internally. Let’s join hands and stop such big-time financial fraudsters from getting any benefits out of the system weakness.
Many eligible consultants are there who have managed the corporate FDIs and we must take investment banking with grand scale as a team to fix the dent in the economic affairs.
What at present we can hope best for the people is hope against hope.