chetak wrote:how were they appointed chairmen, wasn't there a very obvious lack of qualification as well as a very serious conflict of interest. How did the RBI even approve this
The regulator of the banking system is not the PM or FM, but the RBI. If you're only trying to make a political argument, fine but be clear that you're not interested in facts, just handwaving.
If there is evidence of wrong doing or criminal intent, it is the govt that will investigate as well as prosecute. Which finance secy is actually qualified to run a fairly largish bank unless there were other considerations at play. They would have needed GoI approval to accept the job as well as some sort of RBI signoff too.
The RBI is toothless as well as notorious for looking away when it should, in reality, and especially because of its auditing function, be on the top of every scam because it has unrestricted access to the books as well as complete loan details. It actually bears no tangible responsibility that can be pinned on individual(s) so the audit team generally orders fancy lunches and dinners, gets wined and gifted and in many cases accepts "other favors".
Often there is informed talk in these shady financial circles, journos, well connected "agents" with long hands that reach back to the finmin baboo(n)s who "arrange" access to funds. Surely such intel may benefit with some preliminary investigation.
lawyers have a very similar network as do municipal contractors, health inspectors and the food certification guys. Like banks, they all play their own systems.
Isn't it strange that mind boggling sums are given out as loans to companies and it never seems to trigger any alarm or warning bells during any of the audits.
In the nirav modi scam, the low level guys who have been "caught" and booked is just the tip of the iceberg.
It is impossible to fiddle with the system to such an extent that no one else notices. Even the peons at the bank branch who carry files from one desk to another for signoffs would have known. A simple cheque, when presented at the bank undergoes 2-3 levels of scrutiny with various bank people signing on the cheque, the register where the entry has been made, calling up your signature on the screen to verify it and making sure that there is balance available to make the payment. There are regular internal audits, branch audits, outstation audits and the big one, the regulatory audit with "vigilance" looking over everyone's shoulders. People talk at lunch time, gossip the whole day and in any bank it is always about who is on the take and who is favoring which customer.
My family did some property transaction last year and the buyer needed a loan to pay the money. His bank stalled the application for four months because the buyer vowed that he would not pay them off. Four people from the buyer's bank were involved in this one loan application and they blandly kept hinting at the expected payoff. This was in a metro like bombay. The mango man simply pays up and goes his weary way.
Would the SWIFT system be any less complicated. People up and lower down the food chain would surely have known what was happening, spoken to friends and relatives like "chaiwallahs" speak. Every small time petty businessman has "cultivated contacts" at his bank and will usually touch base to pick up the gossip so he knows what type of "gifts" to bring when he needs "services" from the bank on overdrafts on his current account.