oppn parties Will Bankers Now "Lend Without Fear"?

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  • Allahabad HC said that the UP Police is acting as law unto themselves as they detained a person unlawfully even before his arrest
  • Kolkata witnesses traffic snarls on the first day of the Durga Puja festival as revellers start pnadal-hopping
  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
  • Delhi Police detained Cockroach Janta Party founder Abhijeet Dipke, Neha Bora of AISA, student leaders and supporters ahead of a rally in Connaught Place demanding Chief Election Commissioner Gyanesh Kumar's resignation. The protest followed the detention and jailing of two CJP leaders earlier in the week over demonstrations at Jantar Mantar
  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
  • Indian shuttler Jagsher Singh Khangurra secured a bronze medal at the BWF World Junior Badminton Championships in Cairo
  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
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Will Bankers Now "Lend Without Fear"?

By Sunil Garodia
First publised on 2020-01-30 20:21:56

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

The spate of well-publicized big-ticket loan defaults in public sector banks (PSBs) in the last couple of years and the subsequent inquiries by the CVC, CBI and CAG had made bankers jittery in handling such cases. No senior banker was willing to take a risk that could subject him or her to a witch hunt when the difference between genuine commercial failure and culpability or corruption on part of bankers was not spelled out clearly. Further, when the MD and CEO of the bank were made directly, and personally, responsible for the actions of officers down the line, the fear went right up to the top. It made for a scary scenario to find bankers not willing to sanction or disburse loans for big projects and files being held up. Not only that, but the bankers had also refused to take large, but necessary, haircuts while recovering part of the dues under IBC for the fear of being charged with impropriety.

Hence, the government has done well to allay some of these fears. Finance Minister Nirmala Sitharaman had told bankers a couple of weeks ago to "lend without fear" but words have ceased to have meaning in a situation where hundreds of top bankers are being investigated for culpability. It is good that the government has now followed up on the FM's exhortation to bankers and will modify the 2015 framework on large value frauds. It has announced that the MD & CEO would no longer be held personally responsible for large value loan defaults. It has delegated powers to the boards of banks to devise a suitable mechanism that would ensure compliance with the RBI and CVC guidelines in this regard. But more than shifting the responsibility to the board what is required is putting in place better risk management and monitoring systems in PSBs. This calls for structural changes in the banking system.

Concurrently, the government has announced the setting up of the Advisory Board for Banking Frauds (ABBF) to be set up by the Central Vigilance Commission. The ABBF will consist of finance professionals who understand the way lending decisions in banks are made (as opposed to some sleuths in CBI or even CAG who suspect any and everything). It will vet the delinquency in large value loans (above Rs 50cr) and act as a parallel vetting body as instructed by the Department of Financial Services. Inquiries in suspected frauds would start after vetting by ABBF. The government must ensure that the ABBF includes bankers from all specialized areas of banking so that it can take proper decisions. The government has also instructed banks to spruce up their internal vigilance mechanism by setting up officials' panels to speed up such inquiries. Hopefully, all this will translate into easing the pressure off bankers and they can now concentrate on taking informed and sound banking decisions and can now truly "lend without fear".

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