On 25th June, Moneycontrol reported that the government may review the bankruptcy code as public sector banks (PSBs) have begun to accept haircuts as high as 94% to let off the biggest corporate defaulters. Well, it is long overdue. These ridiculous haircuts, or loan waivers, are over and above the massive loan write-offs by PSBs to reduce the embarrassing mountain of bad loans of over Rs10 lakh crore, which are funded by the people through the exchequer. Indian banks wrote off Rs1.53 lakh crore worth of loans in the financial year (FY) 2021 and Rs1.45 lakh crore in FY2020.
Our banks don’t care. Collectively, as a committee of creditors, they seem to have zero individual responsibility, accountability or conscience, at a time when ordinary people are struggling to earn a livelihood. When it comes to resolution of listed entities, there is also no consistency. And, with the Securities and Exchange Board of India (SEBI) having abdicated its responsibility, it is also a perfect opportunity to fool swarms of retail speculators who are ‘playing’ the market like in a Casino.
Things have turned so embarrassing that even industrialist Harsh Goenka protested in a tweet, tagging the prime minister (PM), that went viral. “Promoters stash away money on the side, take the company to the cleaners, get 80-90% haircut from bankers/NCLT—that’s the new game in town. A lot of institutions cleansed by the government—NCLT next please @PMOIndia. We can’t have our hard earned public money being stolen!” he said.
There is anecdotal evidence of how the defaulter-promoter of a controversial resolution has made so much money, with the surge in stock prices of his shares, that he has rented an additional floor in the same super-luxury apartment where he already owns a duplex. But bankers have accepted a massive haircut which is eventually paid by the ordinary citizen.
The All India Bank Employees Association (AIBEA) also voiced a protest about the outrageous settlement with Siva Industries with this poster below. According to market reports, the ‘settlement’ was facilitated by a powerful ideologue close to the ruling party
from Moneycontrol
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