Just like many of you, coming from technology background, i am sometimes dumb founded as to how the loans work. Chinese Loans are totally different game, they come from neighbor who grabs our lands. But the more mystery is still with Indian banks who never seem to learn from experience of lending to bad players.
Big corporate houses take loans to the tune of billions of dollars, as if its every day affair. Recently we have seen the case with Nirav Modi, the diamond Jeweler who looted banks to the tune of 7200 crores. Another crook who got off with is Mehul Choksi.
The Reserve Bank of India (RBI) has admitted to writing off 68,607 crores from top 50 willful defaulters including Mehul Choksi. Read more here https://tinyurl.com/y756afxl
While corporate leaders defaulting on loans is not so uncommon, this happening under Mr. Modi is very disturbing. Forget about getting back the black money, the existing cash in banks is being siphoned off by these business crooks. Genuine business people who need loans are getting shoved with bricks in their asses.
Coming to the point, we all know Ambanis are the most respected business leaders in India. But did we ever understand the way they conduct their business. Does any government show earnest interest to dig deep into their business code of conduct. How they make big bucks, get overseas investors, what value is added to consumers and country as a whole. We have Tatas,Birlas,Mahindra and tech industries like Wipro,Infosys etc. that do business.
But we never hear them becoming this big, not so fast or so furious. Why is that only Ambanis get to break the ceiling every time ? Why only Mukesh Ambani could become so successful in short span in the most competitive telecom sector in India ? Do they flout norms ? Is Mr. Modi making it easy on Mukesh Ambani to cut the competition ? these questions are in all our minds but never expect any credible answers anytime soon.
Right now as i write this article, you know that four of the biggest technology leaders (Facebook,Amazon,Google,Apple) are being grilled in US Congress for possible unethical business practices. Advertisements that cut off conservatives, selling user data to third party, editing content that violates US legislature, interfering with US elections are some major aspersions on these technology leaders. America is free, open society that questions its leaders, quite often, for quite logical reasons.
But do we see this happening in India ? Did we ever question SBI(State Bank of India) or PNB(Punjab National Bank) CEO’s in parliament for lending loans to crooks consistently . Did we ever bring Ambani to be questioned on the possible bribe charges against Reliance Industries ? Did we ever consider Satyam scam with the seriousness to frame fool-proof measures ? Why is that India bows down so badly to the corporate leaders who cheat the public through banks so consistently ?
Recently the CEO of Cafe CoffeDay committed suicide. Investigation revealed that 2500 crores were taken out of the core business to fund another venture. There is still no clarity what happened to the money. Why is that we have these financial black holes created every time ?
A common man like you never gets a loan unless you show Aadhar, Passport,Form16 (employment proof) plus hundred other documents. Any dues you may owe to any other bank makes you unqualified to avail loan in any other bank. I am talking about few thousands of rupees for your survival. The millions of labor who walked hundreds of Kilometers to reach their home town, are they not worthy enough to get Loans ? Why is that their lives are lesser than these business crooks ?
Chinese Loans are common around the world. The BRI (Belt & Road Initiative) gave billions of loans to countries around the world. Infrastructure being the major chunk of investment. Many startups in India have taken billions of investment from Chinese banks including Pay-TM, FlipKart,Big Basket,Zomato etc. While these investments are never in any conflict, some times they do cause friction.
Anil Ambani was considered to be next business leader coming from the Ambani family. This until the telecom bust happened. You know what is the debt he holds onto ? Look at the picture below. This while the nation is going through one of the toughest economic turmoils in a century. 93,900 crores, that’s like the budget of a small African country. You know how many schools or hospitals can be built with this money ? how many millions of labor can have their monthly expenditure met ? Its quite simple, the nation is being screwed by this bad debt practices by the banks & government.
Anil Ambani also took Chinese Loans loans . A court in the United Kingdom on Friday ordered Reliance Group Chairperson Anil Ambani to pay nearly $717 million (Rs 5,447 crore) to three Chinese banks, within 21 days. The banks have been pursuing recovery of funds owed to them as part of a loan agreement made in 2012. We are yet to know what happened to this case. Did Anil Ambani pay back the Chinese Loans ? Did he settle outside court ? Why is that the media stopped reporting about this ?
China is a country that would not take any difference of opinion lightly, 700M$ Chinese Loans you owe, you must be willing to fight battles all over the globe for it. The defiance of Anil Ambani to pay the Chinese Loans he owes, enraged China very much. Mr. Modi is not in a position to do much in this case as its already decided in UK court. China wanted to extract a price from India for what Anil Ambani owed them. They started to escalate the border skirmishes in Ladakh. China considers that the balance of trade can be achieved in any manner, even acting as bully to grab lands, just like loan sharks.
Having grabbed lands before, under the circumstances where India is moving closer to USA, China has bigger reason to occupy Galwan Valley. India owes us 700M$, we take Galwan Valley. This may seem far fetched, but not so when you think like a Chinese. Chinese Loan Defaults by India may not seem much but China does business in a very stringent self interest based strategy. Loss in the business is unacceptable to CCP, unlike India where Banks write off billions of bad loans. No wonder Mukesh Ambani did not offer stakes to Chinese Banks in JIO Enterprise. Mukesh Ambani very well understands that defaulting Chinese loans may result in JIO losing some strategic edge some where in near future.
Mr. Modi must deliberate on this aspect, payoff Chinese loans, secure Galwan Valley. India cannot afford to lose strategic lands . Not for a businessman who has no clue how to run a business coming from Ambani family. Anil Ambani must make a statement on this, clear off any dirty clouds hanging on Indo-Chinese relations. Can we afford to lose anymore lands or brave soldiers ? Chinese Loans come with a rider, be prepared when you opt in.
Just read in news – our Finance Minister Sri. Nirmala Sitaraman says the government cannot pay the states their due share of GST. The government doesn’t have money to give to states. Is it any surprise given the facts that RBI just written off 68,607 Crores given to crooks ? Why should 1.3 billion people suffer because of lack of planning,strategy from Banks & Finance Minister ?
As if the trillion dollar scams are not enough, Indians must now gulp the acid of bad loans to the tune of billions every year. There is a reason why poverty in India is not receding. Ask the Government & Banks. They are the reason we have this mess in the first place.
As to how to recover loans from wilful defaulters like Nirav Modi or Mehul Choksi , we can take a leaf out of China who just grabbed some lands in Ladakh. Take away what matters most to the defaulters- their family wealth & possessions. Their social connections,friends,relatives must also feel the heat. Let these defaulters become desperate enough to either give back the loans or lose anything they ever owned.
PS: Vijay Malya wants to payback the loans, time for Mr. Modi to let him pay his dues to return. Whats the point in holding back when he wants to pay back ?
Update: Government of India, Ministry of Finance has amended a major loop hole in Banking System. ByteBaba is extremely happy about this people friendly initiative. We believe that Business must be enabled with every support government can give. At the same time, there must be ample measures to check the rampant misuse of banking system to safeguard public money. ByteBaba is always people friendly, we shall keep writing on the issues that reflect welfare of the people of India and world.
In the policy statement on 6 August 2020 , a five-page document titled Opening of Current Accounts by Banks—Need for Discipline (read here) became the focus of dark mutterings in the plush boardrooms of private and foreign banks. Very simply put, RBI has put restrictions on who can open a current account with which bank.
A company that has borrowed from a bank cannot open a current account with another bank. It can open a current account with its lending banks under some circumstances, otherwise it is encouraged to use the cash credit and overdraft facilities under which it has borrowed.
the Indian banking system has been used and misused by rich promoters of poor firms, by willful defaulters and by seasoned players.
Armed with lawyers and with the capacity to run rings around the system, they have perfected the art of siphoning off bank borrowings. India’s PSU banks’ non-performing assets (NPAs) were over ₹7 trillion in September 2019.
You may want to read about latest bollywood drug scandal here.