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Sent list of high-profile fraud cases to PMO, not aware of progress: Raghuram Rajan
New Delhi: Former Reserve Bank of India Governor Raghuram Rajan said he had submitted a list of high-profile fraud cases to the Prime Minister’s Office urging coordinated action to bring at least one or two to book.
“I am not aware of progress on this front. This is a matter that should be addressed with urgency,” said Rajan in a note submitted to Parliament Estimates Committee chaired by Member of Parliament Murli Manohar Joshi. He said the banking system has been singularly ineffective in bringing even a single “high profile fraudster to book”.
Rajan said the size of frauds in public sector banks was small, relative to the overall volume of NPAs. As far as corruption was concerned, he said instead of holding bankers responsible for specific loans, bank boards and investigative agencies must look for a pattern of bad loans that CEOs were responsible for. “…some banks went from healthy to critically undercapitalised under the term of a single CEO. Then they must look for unaccounted assets with that CEO,” he said.
According to Rajan, “government permissions and foot dragging” is one of the main reasons why NPAs occur and continue to mount. “A variety of governance problems such as the suspect allocation of coal mines coupled with the fear of investigation slowed down government decision making in Delhi, both in the UPA and the subsequent NDA governments… The continuing travails of the stranded power plants — even though India is short in power — suggests decision making has not picked up sufficient pace to date,” he said.
Looking ahead, Rajan called for caution on the new Insolvency and Bankruptcy Code with promoters testing it with continuous and, at times, frivolous appeals. “It is very important that the integrity of the (bankruptcy) process be maintained, and bankruptcy resolution be speedy, without the promoter inserting a bid by an associate at the auction, and acquiring the firm at a bargain-basement price. Given our conditions, the promoter should have every chance of concluding a deal before the firm goes to auction, but not after,” he said.
He also asked the government to focus on sources of the next crisis, and in particular, refrain from setting ambitious credit targets or waiving loans. “Credit targets are sometimes achieved by abandoning appropriate due diligence, creating the environment for future NPAs. Both MUDRA loans and Kisan Credit Cards, while popular, have to be examined closely for potential credit risk. The Credit Guarantee Scheme for MSME run by SIDBI is a growing contingent liability and needs to be examined with urgency,” Rajan said.
New Delhi: Indian billionaires saw their fortunes swell by Rs 2,200 crore a day last year, with the top 1 per cent of the country’s richest getting richer by 39 per cent as against just 3 per cent increase in wealth for the bottom-half of the population, an Oxfam study said .Globally, billionaires’ fortunes rose by 12 per cent or USD 2.5 billion a day in 2018, whereas the poorest half of the world’s population saw their wealth decline by 11 per cent, the international rights group said in its annual study released before the start of the five-day World Economic Forum (WEF) Annual Meeting in this Swiss ski resort town.
Oxfam further said that 13.6 crore Indians, who make up the poorest 10 per cent of the country, continued to remain in debt since 2004.
Asking the political and business leaders who have gathered in Davos for the annual gathering of the rich and powerful of the world to take urgent steps to tackle the growing rich-poor divide, Oxfam said this increasing inequality is undermining the fight against poverty, damaging economies and fuelling public anger across the globe.
Oxfam International Executive Director Winnie Byanyima, one of the key participants at the WEF summit, said it is “morally outrageous” that a few wealthy individuals are amassing a growing share of India’s wealth, while the poor are struggling to eat their next meal or pay for their child’s medicines.
“If this obscene inequality between the top 1 per cent and the rest of India continues then it will lead to a complete collapse of the social and democratic structure of this country,” she added.
Noting that wealth is becoming even more concentrated, Oxfam said 26 people now own the same as the 3.8 billion people who make up the poorest half of humanity, down from 44 people last year.
The world’s richest man Jeff Bezos, founder of Amazon, saw his fortune increase to USD 112 billion and just 1 per cent of his fortune is equivalent to the whole health budget for Ethiopia, a country of 115 million people.
“India’s top 10 per cent of the population holds 77.4 per cent of the total national wealth. The contrast is even sharper for the top 1 per cent that holds 51.53 per cent of the national wealth. The bottom 60 per cent, the majority of the population, own merely 4.8 per cent of the national wealth. Wealth of top 9 billionaires is equivalent to the wealth of the bottom 50 per cent of the population,” Oxfam said while noting that high level of wealth disparity subverts democracy.
Between 2018 and 2022, India is estimated to produce 70 new dollar millionaires every day, Oxfam said.
“It (the survey) reveals how governments are exacerbating inequality by underfunding public services, such as healthcare and education, on the one hand, while under taxing corporations and the wealthy, and failing to clamp down on tax dodging on the other,” Oxfam India CEO Amitabh Behar said.
The survey also shows that women and girls are hardest hit by rising economic inequality, he added.
“The size of one’s bank account should not dictate how many years your children spend in school, or how long you live — yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care,” Byanyima said.
Chandigarh:Fugitive tycoon Mehul Choksi has given up his Indian citizenship and surrendered his passport to Antigua, as per media reports.
This move by Choksi’s is being seen as an attempt to avoid his extradition to India. Antigua and India do not have an extradition treaty.
India had earlier handed over a request to Antigua for extradition of Mehul Choksi who is charged in connection with India’s biggest banking fraud, and now living in the Caribbean nation after taking its citizenship.
Official sources said a team comprising officials from the Ministry of External Affairs (MEA) and other agencies was sent to Antigua a couple of days ago to request the Antiguan authorities to extradite Choksi, wanted in India in the US$ 2 billion Punjab National bank scam.
As per reports, Antiguan authorities cleared Choksi’s citizenship in November 2017 after India did not give any adverse report to stall his application for it.
Choksi had fled India on January 4 this year and took oath of allegiance in Antigua on January 15. His citizenship was cleared in November 2017.
Choksi’s application for citizenship in Antigua in May 2017 was accompanied with clearance from the local police as required by norms, Antiguan newspaper the Daily Observer reported, citing a statement from the Citizenship by Investment Unit of Antigua and Barbuda (CIU).
New Delhi: Foreign investors have pulled out more than Rs 4,000 crore from the Indian capital markets so far in January, highlighting their cautious stance towards the country.
This comes following a collective net inflow of over Rs 17,000 crore in the capital markets both equity and debt by Foreign Portfolio Investors (FPIs) during November and December.
Prior to that, they had pulled out a massive Rs 38,905 crore in October.
According to data available with the depositories, FPIs withdrew a net amount of Rs 3,987 crore from equities and a net sum of Rs 53 crore from the debt market, taking the total outflow to Rs 4,040 crore during January 1-18.
Market experts believe that FPIs are continuing with their ‘wait and watch’ approach towards India.
Going ahead, the focus would be on the budget, progress on the economic growth front and general elections, they added.
Other factors such as movement in crude prices and currency as well as US-China trade relations will also play a role in FPI flows, they added.
Harsh Jain, COO at Groww, an online MF investment platform, said 2019 is likely to see a lot of volatility because of the rate hikes and dollar instability, but the Indian markets may be able to weather the storm.
“India offers better investment opportunities due to consistent growth, supportive global factors and attract valuations. We should expect positive inflow in coming months,” he added.