Wednesday, January 30, 2013

Rising Bank Frauds,Scams AND Bad Assets


Collected from Blogs of Himadri   (Himadri Shekhar Bhattacharjee)
FRAUDSTERS TAKING BANKERS FOR A RIDE?
Today, “banking” and “scams” have become synonymous with each other. 'SCAMS' 'FRAUDS' etc. are at full-of-the-moon, all over the print and digital media, nowadays.

What is the reason behind PS Banks' peculiar love for 'sleeping with the enemy' who never stop before putting their health at risk by mounting NPAs and frauds? Let us delve deeper into this.

Bank managers in India, particularly those belonging to the public sector, have a weakness for one simple thing: an insatiable hunger for deposits. Bank managements give undue importance to mobilization of deposits and branch managers who succeed in exceeding the deposit targets are rewarded with promotions and/or postings of their choice, if not a monetary reward.

Those who know this weakness can win over bank managers by keeping fat balances in their current accounts for a short period or mobilizing bulk deposits by fair means or foul, with a clear intention to cheat the bank in some way or the other. This, followed by lavish hospitality, gifts and presents, puts the bank manager under an obligation to reciprocate the favour by acceding to the demands of fraudsters. This is the beginning of all frauds in the banking sector. Bank managers, who fall prey to such tactics of so-called customers, invariably end up becoming a party to scams and pay a price.
SCAMSTERS ARRIVE THROUGH DIFFERENT INCARNATIONS OVER THE YEARS.

The Harshad Mehta scam, the Ketan Parekh scam and several others were perpetrated by those who knew how to exploit the weakness of bank officials. While some officials were facilitators and willingly assisted scamsters, there are many innocent victims who have willy-nilly become part of the scam. For innocent victims, impeachment by the media even before a case is filed, and then the inordinate delay in getting justice, makes their lives unbearable. The real culprits use their ill-gotten gains to delay punishment by fair or foul means and continue to enjoy their expensive lifestyle. We need a system that can deliver justice by punishing the guilty and exonerating the innocent in a reasonable time.

JUSTICE SHOULD BE FAST AND JUST.

Consider this true story. An employee in Dubai stole a draft leaf from the cashier’s drawer, got it fraudulently signed by the manager through an unauthorized ‘cash received’ stamp and sent it to his friend in India. The fraud was discovered at the end of the day when the cashier found a shortage of cash. A hurried meeting of the employees to find out if anyone had a clue about the fraud yielded no results. So the manager first stopped payment of the fraudulent draft issued on a bank in India to avoid a loss and reported the matter to the company owner. He, in turn, informed the police through a simple phone call; they swung into action based on this telephonic request and, after some interrogation, the guilty employee buckled under pressure and confessed.

He was immediately arrested. A charge-sheet was filed within seven days and the hearing of the case commenced within a week. In less than three weeks, the employee was sentenced to six months’ imprisonment followed by deportation. Can there be a simpler legal system and faster justice anywhere in the world?

SCAMSTERS, CONNIVING EMPLOYEES AND SOME UNION LEADERS RAMPAGING THROUGH PS BANKING SET UP LIKE BULLS IN CHINA SHOPS.

POOR HRDDs and continuing enmity to employees, drive the ultimate nail to the coffins of these institutions, which were created to pool resources of masses and put this to national development through effective inter-mediation.

Employees are scared to take proactive decisions, for the sake of building businesses, at the fear of incurring wrath of vigilance officials, at these banks. They are bullied by the 'suspension and charge sheet culture' rampaging through these banks. You either, molly coddle your bosses and tread their paths or face the music. Honest employees are put to suspensions and kept as such, for years, ignoring vigilance manuals and CVC guidelines.

Even after departmental inquiries get completed, inquiry officers continue to sit on the files and refrain from giving decisions, thus, hatching evil plans to harass honest employees, who, once upon used to be their very own work place buddies.

They derive satiric pleasure by showing thumbs to CVC guidelines, while the poor employee continue to toil in suspension and the vindictive bosses and a segment of union secretaries tango together.

This unholy nexus between some union secretaries and vindictive and egoist bosses continue to thrive and be a source of enjoyment for them.

WHILE HONEST AND LOYAL EMPLOYEES CONTINUE TO SUFFER,
FRAUDSTERS REAP RICH HARVESTS AND THE SHADOW OF HARSHAD'S , KETAN PAREKH'S LOOM LARGER OVER THESE CHERISHED INSTITUIONS CALLED 'NATIONALIZED BANKS'.

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