Black Sheeps of the Modi Cabinet

arun jeitleyThough it has been publicized that the Government’s demonetization move was to curb black money but it was solely driven to provide oxygen to the huffing puffing banking system. If the decision involved curtailing the shadow economy why didn’t it sacked the top dogs of the politics and business who remain the serious offenders till date. What was the motive behind not making those names public who swallowed millions and billions of the tax payer hard earned money.

These scams were the result of nexus between bank’s top executives and businessmen. Just because the government lacked guts to act upon these scamsters common man was put on edge. So far bank deposits have sky rocketed as a result of demonization. Banks sucked the currency in circulation and hence people can’t withdraw their own money.

Current scenario and circumstantial evidences aptly state demonetization has dimmed the biggest financial scams resulted by the gamut of banks, politicians and so called business tycoons. The entire exercise of currency exchange that was laden on public was to fill the drying treasury. The linkages of biggest scams involve key people of modi’s cabinet, finance minister, finance as well as economic affairs secretary. Ministry of Science and Technology MOS and Telugu Desham Party MP YS Chowdhary is among those who gulped crores of bank’s money. And now the question arises why the Prime Minister ignoring these names? Our Banking system had always been the victim of these top level games. The more you get into it the more vicious it becomes. Biggest banking frauds and currency exchange exercise is bit of it.

When it comes on to financial frauds we are only aware of Vijay Mallaya and Lalit Modi though the country enlists thousands of Mallayas who laundered a sum not less than Rs 4903180.79 lakh.  Chauthi Duniya has a list of atleast 6,500 such names.  They are behind the laundering of 53.1 thousand Crores from various banks. We’ll disclose these names in our upcoming issues.


Coming on to YS Chowdhary who’s among the willful defaulters of the Modi cabinet.  Debt of his company Sujana Metals reached Rs 1572 Crores from Rs 765 Crores in five years. During this duration company’s profit was merely Rs 26 crores and surprisingly its market captization was only Rs 75 crores. And now the question arises how did the banks sanctioned such a hefty sum to a midcap entity.

To escape the default company announced corporate debt restructuring. Likewise Sujana Towers turnover was Rs 1803 crores and it availed the loan of Rs 2,000 crores from the various banks. The company again escaped default by debt restructuring. Sujana universal’s profits never ever exceeded 1 percent but it continued to get the huge loans which resulted in the outstanding of Rs 425 crores. The total outstanding on this company amounts to Rs 1609 crores. Is blacklisted by central Bank and Bank of India.

Banking Frauds are not new to India. The chain includes influential people from banking, business world and politics. In order to avoid NPAs banks grant loan to entrepreneurs and systematically public’s hard earned money goes to their pockets. These loans and converted to long term loans, remains unpaid till date and banks are barred to disclose the names of these willful defaulters. Neither banks nor the government initiated any proceedings to entrap these offenders.

Only when Mauritius Commercial Bank acted against Hestia Holdings, a Mauritian company and warrant was issued against him Chowdhary’s fraud came to light. Hestia Holdings default amounts to Rs 106 crores and an undertaking of Chowdhary’s Sujana Universal Industries. And hence could be understood why fraudulants like Mallaya are roaming freely. Same is the case with Lanco, Progressive Contruction who are indebted with millions.

Willful default Scams history extends to infinite accounts. According to an estimate 3192 accounts of various nationalized banks lost Rs 29,775 crores. The State Bank had to live up the biggest blow. It’s default peaked at Rs 18,576 crores. Private banks lost Rs 10,250 crores from 792 accounts where financial institution defaults mounts to Rs 792 crores from 42 accounts.

The sum is comparatively lower for foreign banks which is Rs 463 crores. These willful defaults were well planned and were implemented in an organized manner. Precisely seepages in the legal system were utilized execute scams. However government turned a blind eye.

Almost every bank has suffered the willful pocketing of its money. Punjab National Bank lost Rs 9,44,505 lakh,  Central Bank of india Rs 3,57,409 lakh, Oriental Bank Rs 3,54,583 lakh, Union Bank Rs 2,99,087 lakh, Andhra Bank Rs 2,42,847 lakh, Vijaya Bank Rs 1,89,491 lakh, Bank of Baroda Rs 1,36,879 lakh, Indian Bank Rs 1,20,027 lakh, Dena Bank Rs 80,230 lakh, Bank of Maharashtra 77,555 lakh, Allahabad Bank 48,774 lacs, Punjab and Sindh 24,755 lakh, Indian Overseas Bank, 1,380 lakh totaling a sum of Rs 28,77,525 lakh approximately.

90 Lac Transactions without PAN! 

In order bring people’s unaccounted money on records government initiated income disclosure scheme this year which ended three months back. Exercise clearly indicated the depth of money laundering as 90 lakh transactions were done without Permanent Account Number. Out of these 14 lakh were ‘high value’ and 7 Lakh were ‘high risk’ transactions.

Notices were sent for sacking people behind the later but all in vein. Despite this eye opening fact government didn’t get alerted. Perhaps the whole laundering exercise was the result of nexus between bank officials and the regulators. Chauthi Duniya exposed the whole IDS scam. Government was alerted regarding the misuse of form 60/61 which is otherwise used to avail exemption on farm income. However government remained unaffected.

Job Market Hit Hard

Government impulsive move to demonetize Rs 1000 and 500 notes proved nightmare for the 4 crores construction and retail sector workers in the country. Majority of the seasonal workers are struggling to make ends meet. For essentials and food they are completely dependent on charity now.  Demonetization is all set to reduce country’s economic growth by 1% over next one year with job market likely to see 4 layoffs.

Real estate, construction and infrastructure are the others that are likely to feel the heat of demonetisation. Recruiters and head hunters expect the sectors to lose over 100,000 jobs in the next 12 months. Infrastructure Giant Larsen and Toubro reduced 14000 employees within weeks of demonetization. Cement and steel company have cutoff their production.

E-commerce business which was growing at a pace of 500% annually is all time low. Gujarat’s tile business, Meerut’s scissors makers, Ludhiana’s cycle manufacturing units and Agra’s leather industry and weavers had been hit hard. Currency crunch add on to farmers woes as sowing for rabi is about to start. Government’s move will impact 10 crore labourers working the farm sector.

Cash on delivery being almost 70% of the overall e-commerce business, the sector is likely to take a hit and lose almost 20% of their headcount in the next few months

There’s a provision in section 26(2 ) of RBI act that a particular series of currency can be demonetized at one time. Hoever in this case government demonetized the 86%  currency in circulation which caused havoc all around. As far as the secrecy is concerned the decision’s confidentiality is all also questionable as government is suppose to inform Reserve bank a month prior before initiating such decisions.  Three directors of RBI board belongs to private companies. Dr. Nachiketa had been associated with ICICI bank, Dr. Natarajan Tata belonged to  TCS. Similarily Bharat Narottam Doshi is ex- CEO of Mahindra and Mahindra. Examples are strong enough to put question mark on government’s secrecy saga on demonetization. On the contrary this so called pro-poor move has nailed the common man.

Government estimates on black money failed badly. Out of 14.6 lakh crores it was estimated 40% of the currency won’t come into the banking system. Equations failed 11.55 lakh crores are back in the form of deposits which is 81% of the demonetized currency. Within in days of demonetization black money converted at a rate 40% in white. Real estate brokers, bank employees, cooperative setups behind the scene.

Windfall Gains for UP Jandhan Accounts 

Within 14 days of demonetization UP Jandhan account reported a record surge in deposits. The state has largest number ie. 3.8 crore Jandhan accounts. Infact out of 16.47 new accounts that were open after demonetization, 22.3% belongs to the state only. During the reported duration Rs 11,781 crore were deposited in these zero balance accounts in UP followed by West Bengal which recorded deposit of Rs 8,850 crores.

Rajasthan stood 3rd with 6104 crores and Bihar 4th with an amount of 6088 crores. Total deposits of these 25.68 crore accounts soared up to Rs 27,200 crore within 2 weeks. Upcoming  UP elections are seen as the probable reason for stocking of the huge sum.


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