A guy walks into a bank and asks for a loan (sounds like the start of a joke, doesn’t it? Unfortunately, it isn’t). The banker sits him down and goes through the requirements for the loan.  The guy agrees to furnish all documents needed at which point, the banker does the first of many checks – Credit worthiness (Is the person able to repay the amount and, if not, does he have enough collateral to cover the loan).

Once these checks have been passed, the bank issues a check to cover the loan. It is expected that the person will make payments every month to cover the principle and the (outrageous?) interest.  This is what happens to you and I, the common people.  We then make these payments for the next 10-20 years and get to own whatever it is we needed the loan for. We sweat blood every day in order to keep our end of the bargain, except…  The banks don’t have any such checks, especially where banking is nationalized.

Back in the late 80’s and early 90’s, here in the US of A, we had a similar occurrence (The Savings and Loans scandal). Many retirees and seniors had their money in banks, as most people would.  Some of the retirees had invested in,  the now infamous, Savings and Loans Associations (akin to the Chit Funds in India). These S&L institutions lent money to people who needed to buy a house, a car, a boat (use your imagination). When over a thousand S&L institutions declared insolvency, the estimated loss was over 250 Billion USD. It is reported that many seniors, who lost their life savings, died of heart attacks or suffered early insanity due to this while others were left penniless. What did the government do? Not much. They bailed the S&L companies out to the tune of about 4 billion USD. These types of bail-outs are happening nearly every other month in India.

We have come to expect many state governments, in India,  to dole out money, sometimes low interest and most times no interest, to the farmers and other underprivileged communities.  The most recent such “dole-out” happened a few months ago in the states of Madhya Pradesh and Rajasthan. Let’s not forget, even for a minute, that the promised amount never really met the actual amount. For anyone to be given  25 INR as dole-out is an insult, leave alone degrading the entire farmer community.

Where do these state governments get the money from? The money comes from our hard earned deposits and taxes.  Most people keep their money in the banks which then invest in the stocks (risky as it is, it is the only way they can get a return on these large deposits).  We also pay our taxes which are then filtered down to the states.  The taxes are meant to be used for the benefit of the public at large; not a particular community. The return on our deposits, are meant for our personal gain; again, not the public at large. But, how does one monitor who rightfully gets the money? This, my dear reader, is where it gets tricky.  In India, the Reserve Bank of India is the appointed institution to monitor any mismanagement of funds. When the RBI is allegedly involved in these scams, who monitors the monitor?

Politicians, regardless of whether they’re in the USA or India, will try to gain political advantage by assisting some selected people with their “political aashirwad.” When a politician holds that much power in his/her hands, more often than not, it goes to his/her head. The expectation is, not just a vote but, financial benefits (Some would say, benefits for both). Benefiting can only happen when the loan amounts are outrageous, like the 11,000 Crores loaned to Nirav Modi, Vijay Mallya and Choksi (there are others too).

The kick-backs go further up than just a minister; probably all the way up to the top.  I was told, by a friend who is HIGH UP in the Indian financial food chain, that this scandal is just the tip of the iceberg.  According to him, between 2005 and 2014, many such loans were approved and these would come out to the open.  This brings up my question: Is Brutus an honorable man?  We have been told that PC and his ilk are involved, but who else was involved in this massive cover-up?  Was MMS involved? Will we ever know?

While ordinary people struggled to find the money to pay their bills, it wasn’t very difficult for scammers to get easy money from the banks. All you needed to have were the proper connections. Who the ‘proper’ connections were is anyone’s guess.

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