Watching The CM At Work

CM’s office goes live, only for a while

Does a live stream of the CM's office bring about transparency in administration? It is a step forward sure.  But how much time does he actually spend in the office?  A live stream with audio of his entire day on the other hand would be what is required, along with an audio stream of his night time.  Maybe his assistant's office needs to be live streamed too.

'CIC orders RBI to expose 100 top loan defaulters'

CIC orders RBI to expose 100 top loan defaulters

In a move to usher in transparency in the functioning of banks, the Central Information Commission (CIC) has directed the RBI to reveal the names and divulge other details of the top 100 businessmen and industrialists defaulting on repaying loans taken from public sector banks. 

The CIC has also directed the country’s Central bank to post the complete information of all such defaulting businessmen and industrialists on its web site as part of a suo motu disclosure mandated under Section 4 of the transparency law, before December 31. The RBI has been directed to update this list every year. 

“There can be no doubt that the information on defaulters received from banks are held by the Reserve Bank in a fiduciary capacity and are confidential in nature,” an RBI official had said while deciding on Kapoor’s RTI application. 

Although Information Commissioner Shailesh Gandhi agreed with the RBI’s argument that such information was fiduciary in nature, he said that exemption could not be allowed when there was larger public interest in the disclosure. 

Gandhi’s argument was that “this (disclosure) could lead to safeguarding the economic and moral interests of the nation. The commission is conv­inced that the benefits accruing to the economic and moral fibre of the country, far outweigh any damage to the fiduciary relationship of bankers and their customers if the details of the top defaulters are disclosed.” 

Absolutely.  Let the names out.  Let us see where the money is going to.  We know that SBI has an exposure of Rs 1,400 crore to Kindfisher Airlines.  Who else has taken PSU bank money?  

In fact, why restrict it to the top 100?  Put it all out there.  Maybe the said businessmen and industrialists will be more careful taking out loans in the first place.  Each public sector bank could put out its own list too.  They are already doing it for the aam defaulters : India's banking lobby asks lenders not to use tough bad loan recovery measures

The Indian Banks Association -- a lobby group for banks -- has asked lenders in the country not to use very harsh measures to recover outstanding loan amounts from their customers, after India's public sector lenders including Corporation Bank and the State Bank of India adopted 'name and shame' tactic to recover bad loans. 

The banks displayed names, photographs and other details of willful loan defaulters on the notice board of its branches from where loan amount has been sanctioned, with a view that through such exercise, the fear of social ostracisation would drive the borrowers to repay dues owed to the bank.

Transparency On Bank NPAs

The Finance Minister seems to believe that disclosing the names of corporate borrowers who have defaulted on their loans is not desirable. His reasoning:

The disclosure of their names in a public forum (such as Parliament) will make the banking industry more sick, Mr Mukherjee told the Lok Sabha on Friday. He also highlighted the aspect of confidentiality clauses (in loan agreements) coming in the way of releasing the names of defaulters.

“If this (disclosing names) is done, a person will be declared insolvent even before the Court declares them (defaulters) as insolvent. And whatever possibility of recovering money from them will go. It will be depositors' money that will be lost (if we disclose)”, he said.

There must be some stage in the default process when the bank writes off a loan. Why not disclose the names along with the defaulted amount at that point? As for the confidentiality agreement - why is it there in the first place?

The gross NPA numbers are quite large: NPA write-off by new private banks up four-fold. Approximately Rs 75,000 crores, private and public banks taken together.

Making Up For The Missing Posts

Was unable to post for some days due to various reasons. I'm back and hope to be more regular - 'hope' is the the keyword. Anyway, wanted to highlight some stories that I did not post about but wanted to.

This killing comment from The Hindu's editor about the Kosovo seccession and Bush's comment on it was priceless:

Kosovo’s unilateral declaration of independence has thrown the fragile Balkan peace into question again and caused much disquiet elsewhere in the world. The reactions of other states will be crucial. U.S. President George W Bush, with his characteristic grasp of international affairs, initially said: “The Kosovoans are now independent”;

Then there was the Rice testimony on the nuclear deal to the US Congress which justifies one of the criticisms put forward by the Left against the deal:

Washington: The Bush administration has said an agreement between India and the Nuclear Suppliers Group which will allow New Delhi to engage in nuclear trade will be supported by the U.S. only if it is “consistent” with the Hyde Act.
“We will support nothing with India in the NSG that is in contradiction to the Hyde Act. It will have to be completely consistent with the obligations of the Hyde Act,” Secretary of State Condoleezza Rice told the House Foreign Affairs Panel.
Ms. Rice said if the Bush administration did not adhere to the Hyde Act — which, according to opposition parties in India, takes away the country’s nuclear sovereignty — U.S. lawmakers will eventually refuse to pass the India-U.S. civilian nuclear deal if and when it comes up in the Congress.
“We’ll have to be consistent with the Hyde Act or I don’t believe we can count on the Congress to make the next step,” Ms. Rice said in response to a query from the Chairman of the panel, Howard Berman.

Another thing, that was actually good to see, was the Congress giving back to the BJP on the issue of terrorism, over two days. Here and here. That's right - say it loudly and clearly and very publicly. After all, the last thing we need is another right-wing party coming to power on the basis of being 'strong' on terror.

Another story which I saw on cnet.com reinforces that the Internet has made so many things possible. And a lot of them are a force for the good. Like exposing Swiss Banks that apparently help launder money among other shady activities:

A federal judge in California has pulled the plug on Wikileaks.org, a Web site that specializes in posting leaked documents often provided by whistleblowers.
U.S. District Judge Jeffrey White on Friday ordered that the domain name be disabled at the behest of a group of Swiss bankers who filed a lawsuit alleging that confidential information appeared on Wikileaks.org.
... Wikileaks' summary of the leaked documents centers on Rudolf Elmer, the former chief operating officer of Bank Julius Baer in the Cayman Islands. The summary alleges the bank supports "ultra-rich's (sic) offshore tax avoidance, tax evasion, asset hiding and money laundering." The bank has refused to comment.