Is Privatization is the remedy for NPA of Banking system??

[Dibyajyoti Guha]

Dear all,

Recently ASSOCHAM surprisingly advised the government privatising of public sector bank rather than condemning Nirav Modi for his cheating the Banks.

It is very strange and interesting that the Associated Chamber of Commerce, the mouthpiece of the industrialists and business houses has suggested privatization of banks in view of the recent fraud in PNB. 

They have conveniently forgotten the track record of private banks in our country. 736 Private Banks Failed, Amalgamated, ceased to function/ transferred their liabilities and Assets, went into liquidation between 1948 and 1968. 

Private Banks put under moratorium in public interest due mismanagement and gone out of existence from 1969 
1969 1. Bank of Bihar 
1970 2. National Bank of Lahore 
1971 3. Eastern Bank 
1974 4. Krishnarao Baldeo Bank 
1976 5. Belgaum Bank 
1985 6. Lakshmi Commercial Bank 
1986 7. Miraj State Bank 
1986 8. Hindustan Commercial Bank 
1990 9. Traders Bank Ltd. 
1990 10. Bank of Tamilnad 
1990 11. Bank of Thanjavur 
1991 12. Parur Central Bank 
1991 13. Purbanchal Bank 
1993 14. Bank of Karad Ltd. 
1995 15. Kashinath Seth Bank 
1997 16. Punjab Co-operative Bank Ltd. 
1997 17. Bari Doab  Bank Ltd. 
1999 18. Bareilly Bank Ltd. 
1999 19. 20th Century Finance Corporation Ltd. 
1999 20. British Bank of Middle East 
1999 21. Sikkim Bank Limited 
2000 22. Times Bank Ltd. 
2001 23. Bank of Madura 
2002 24. Benaras State Bank Ltd. 
2003 25. Nedungadi Bank Ltd. 
2004 26. South Gujarat Local Area Bank 
2004 27. Bank Muscat SAOG 
2004 28. Global Trust Bank Ltd. 
2006 29. Bank of Punjab 
2006 30. Ganesh bank of Kurundwad 
2006 31. UFJ Bank Ltd. 
2007 32. United Western Bank 
2007 33. Lord Krishna Bank 
2007 34. Sangli Bank 
2007 35. Bharat Overseas Bank 
2008 36. Centurion bank of Punjab 

If private banks are really efficient, why these Banks were closed down and merged with others.  Most of these banks were merged with public sector banks. 

PSBs have become the Neelakana Mahadev to swallow the poison of failure of many private banks and it is funny that Assocham is asking PSBs to be privatized now. 

We understand their greed but they cannot claim that private banks are more efficient. 
Secondly, take the alarmingly increasing bad loans in Banks.  Who are the delinquents and who are the defaulters?  Are all of them not private companies, industrialists and corporate houses ?  12 cases of NPAs have been referred to NCLT for insolvency and bankruptcy proceedings involving Rs. 253,000 crores.  Who are they? Are all of them not top private corporate borrowers.  Why they did not repay the loans?  Is it their efficiency?  Should banks be privatized and handed over to these people? 
In the PNB fraud, no doubt there is an unpardonable sin on part of those officials who have gone out of the way to favour Nirav Modi.  But who has tempted them and influenced them ?

 Is it not private corporate giant Nirav Modi ?   Take any major fraud in our country. 

One will see the hand of private corporates in it.  
Let them not forget that bulk of the loans given by public sector banks are to  private corporate houses. 

If public sector banks are not efficient, why do they avail these loans from PSBs and why have not taken such loans from private banks. 
Devil should not quote scriptures.  We feel to advice Assocham to ask the private sector corporate defaulters to repay the bank loans to the PSBs and condemn NIMO for the fraud he has committed on PNB.

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With regards,
 -- Dibyajyoti Guha.