Are We A Corrupt Country?

                                                                     Nirav Modi      


 CORRUPTION IS in the news again. Or rather, it has never been out of it in India, giving rise to the question, “Are we a corrupt country?” The latest scandal involving Punjab National Bank and other public sector banks has only brought that question into focus.

The Congress-led United Progressive Alliance (UPA) regime was known for the largest number of scams and  the National Democratic Alliance (NDA) led by Bharatiya Janata  Party came to power mainly on the plank of ridding the country of corruption. The AIDMK campaigned against DMK on the  issue of corruption, won  only to became equally known for corruption.

Though the NDA government boasts to be free from corruption at ministers’ level it cannot claim the administration is completely honest and that no government official takes bribes any more.

   The Punjab National Bank

In pre-Independence India Mahatma Gandhi removed an aide suspecting that he   misappropriated money, Incidentally (or is it ironically?) the secretary was named Advani. A former Janata Party governor who was in the freedom movement told me this and wanted in-depth research to bring out the facts.

Then Gandhiji himself removed a Chief Minister of  C.P. and Berar at Nagpur, Dr. N. B. Khare (who later joined Hindu Mahasabha), suspecting some financial irregularities and brought in an outsider from Allahabad, Kailas Nath Katju as CM in Nagpur. That Katju did not know the names of some of his own ministers was the joke in those days.

One of the earliest scandals to figure in Parliament was the Jeep Scandal during Jawaharlal Nehru’s second term. Though corruption was not as rampant as it is today, it was known that many government officers’ “other income” was more than their salary and it was accepted as normal.

The main reason for corruption is that there is no social stigma attached to it. No one was socially boycotted or looked down upon because of taking bribes, as long as he was rich. On the other had if one was an MLA or MP or Minister for a considerable period and still did not make millions, he is looked down upon as inefficient or incompetent.

The most honest Chief Ministers also had the shortest terms – Comrade Ram Kishan of Punjab, S. R.Kanthi of Karnataka, T. Prakasam of Andhra and  Kailas Joshi of MP are examples.

Winning elections needed crores of rupees and money was collected though corruption. If a fraction of it went into politicians’ pockets it is nothing unusual.   Or wrong. Es. We are a corrupt people. We even try to bribe god with offerings in return for favours.

A widely circulated post following the Rs.2 billion scam in Punjab National Bank says:


(1)  A Minister has a talk with a bank’s Executive Director

(2) The ED calls the Chief General Manager

(3) The CGM has a briefing with the DGM

(4) The DGM talks to the Branch Manager

(5) A blank loan application is put up. It contains only the beneficiary’s name, and loan amount. No other details are available.

(6) No credit appraisal is done. No unit visit is made.

(7) Loan is sanctioned by a Special Committee or through the Credit Hub – so that no individual officer can be held responsible if the loan goes bad.

(8) A Manager or Asst Manager signs the loan papers.

(9) The loan goes bad almost immediately after issue.

(10) Additional loans are sanctioned to help the “business” become profitable. (Although there is no actual business).

(11) Auditors point it out. Audit report is put up to the Board, but not discussed.

(12) Next year there is another Audit observation. But auditors are assured that “everything” will be “taken care of”.

(13) Next year the Auditors’ contract is renewed. The Audit observation is re-phrased as “loan renewed due to system error”.

(14) In the fourth year, the Inspection Team points it out after the loan has become a Loss Asset.

(15) Other related bad loans are re-structured as per the advice of the Inspection Team.

(16) In the fifth year, the Inspection Team finds that the loan beneficiary has vanished, and the company is untraceable.

(17) Head of Inspection Department edits and re-phrases the Inspection Report. He feels that inspectors should focus on the overall profitability of the Bank and not on the individual fraud cases.

(18) In the sixth year, Inspection Report mentions that adequate Provisions have been made, and there was no threat to the Bank.

(19) In the seventh year, another Inspection Team finds out that the same loan beneficiary has taken another sixteen such loans, all of which have gone bad.

(20) Head Office tells the Inspection Team that their findings are inconsistent with earlier findings, and advises them to re-draft the Report.

(21) When Inspection Team writes the same findings again, they are told that unless they “improve” their quality of work, they may get transferred to Guwahati and they may find it difficult to even get a promotion.

(22) Inspection Reports are then finalised at the Head Office.

(23) The next year Government changes. The new Minister wants an enquiry.

(24) The Assistant Manager, who had signed the loan papers, gets suspended. (He is assured that he would be suitably reinstated after the initial storm dies down.)

(25) The DGM gets promoted as GM. The CGM gets promoted as ED. And the Executive Director

The Rs.2 billion  Punjab National Bank fraud by Nirav Modi and Vijaya Mallya  cheating banks of hundreds of crores  are only the tip of the iceberg. Scores of other scams will come out soon,

They have occurred mostly during the UPA rule.And yet Congress uses them as sticks to beat Narendra Modi with as they came to light during NDA rule.

Modi’s fault, perhaps,  was that he exposed them. He should have remained silent like his predecessor, ‘Maun’ Mohan Singh.