Babu-Neta-Bizman Nexus a Bane for Banking

Nirav Modi, Mehul Choksi, Vijay Mallya, Vikram Kothari and the list is getting longer. The cases against corporates, especially those involving bank frauds, are increasingly tumbling out of closed chests

- Kingshuk Nag

In October last, finance minister Arun Jaitley had announced a major recapitalization plan involving infusion of Rs 2.11 lakh crore — spread over a few years — in public sector banks (PSB). The plan was – it goes without saying — intended to shore up the finances of the ailing banks that cumulatively have notched up non-performing assets (NPA) of Rs 9.5 lakh crore. Of the entire amount, Rs 88,139 crore was to be pumped into the banks by the end of this financial year (March 31).

As per the plan, the highest amount (Rs 10,610 crore) was to be given to IDBI Bank. This was not surprising considering that Mallya of Kingfisher Airlines has for all practical purposes run away with a loan amounting to Rs 900 crore from IDBI setting back the bank hugely. Rs 5,473 crore was to go to Punjab National Bank (PNB). But now these calculations might go awry.