Title: A Deeper Malady
(Address the breakdown in internal controls and supervisory mechanisms in banks)
Barely days after news of the ₹11,500 crore fraud at Punjab National Bank broke, another but very different scam of a ₹3,695 crore wilful loan default has surfaced.
The Central Bureau of Investigation has registered a case against three directors of a Kanpur-based company, and others including unknown bank officials, on allegations of cheating a consortium of banks by siphoning off loans disbursed to the company.
• If the two cases must be compared, the similarities lie in the breakdown in internal control mechanisms and in the supervisory failure at the banks.
• In the case of Kanpur-based Rotomac Global, it had availed credit limits from a consortium of seven public sector banks.
• It took too long for the criminal complaints to be filed against the defaulters.
• On Bank of Baroda’s website Rotomac was listed as its top defaulter almost a year ago; the account had been classified as an NPA in 2015.
• In the case of the Punjab National Bank fraud, letters of undertaking were issued bypassing the bank’s reporting system; the three-tier audit failed to detect the malfeasance. In contrast, BoB was not oblivious of the Rotomac default and took unconscionably long to act. It is important to determine why the Reserve Bank of India, which is vested with keeping an eye on bank books, was unable to take prompt corrective action in this case.
• It is time the Centre, the major shareholder in these institutions, takes serious steps to translate this intent into action.
• To restore the depositor’s faith in the banking system, the government, the RBI and the judiciary must ensure that prompt and salutary action is taken.
Title: For cleaner, fairer elections
• (Removing opacity in party funding and campaign finance is still a work in progress)
• Electoral reforms in the hands of politicians is a classic example of a fox guarding the henhouse. While there are many policies that both major parties disagree with each other on, they form a remarkable tag team when it comes to electoral reforms.
• most of the electoral reforms interventions are directed at candidates, and rarely at the parties.
• The Supreme Court’s recent decision on information disclosure (Lok Prahari v. Union of India) paves a way for future constitutional interventions in India’s party funding regime, including the scheme of electoral bonds.
• In 2002, the Supreme Court, in a landmark decision in Association for Democratic Reforms v. Union of India (ADR), mandated the disclosure of information relating to criminal antecedents, educational qualification, and personal assets of a candidate contesting elections.
• Sixteen years later, the court has extended the disclosure obligation to further include information relating to sources of income of candidates and their “associates”, and government contracts where candidates or their associates have direct or indirect interests.
• If there is one piece of information that a voter is most deprived of in India, it is that about party funding. While the scheme of electoral bonds has received much attention, another significant facilitator of opacity is an obscure
• The provision exempts political parties from disclosing the source of any contribution below ₹20,000. This gives political parties a convenient loophole to hide their funding sources by breaking contributions into smaller sums, even ₹19,999 each. As a result, a vast majority of donations to political parties come from sources unknown to voters.
• Is the information about party funding relevant for a voter in choosing a candidate?
• Parties in India play at least two crucial roles in the election of candidates, namely financial support to candidates, and, more importantly, setting the agenda.
• However, even if one assumes that parties do not fund their candidates, there is another rationale for disclosure of party-funding sources. Parties occupy a special space in India when it comes to agenda setting. By virtue of a strong anti-defection law in India, all elected legislators are bound by their party agenda. If an elected legislator refuses to toe the party line, she can be disqualified.
Vocabulary words:
• Malady (noun) = A disease or ailment (रोग)
• Consortium (noun) = An association, typically of several companies (संघ)
• Siphon off (phrasal verb) = To draw off (वसूलना)
• Complicit (adj) = Involved with others in an activity
• Malfeasance (noun) = Wrongdoing, especially by a public official (जुर्म)
• Oblivious (adj) = Unaware (बेख़बर)
• Vest (verb) = Confer or bestow (power) on someone (निहित)
• Deprive (verb) = Prevent from having or using something (वंचित)
• Opacity (noun) = Lack of transparency (अस्पष्टता)
• Obscure (adj) = Unclear, uncertain (अस्पष्ट)
• Facade (noun) = Appearance (मुखौटा)
• Jurisprudence (noun) = A legal system (न्यायशास्र)
.jpg)