By K Raveendran
Former RBI governor Raghuram Rajan claims to have sent a report to the PMO giving details of major bank default candidates, but apparently there was no action taken on it. There are two possible scenarios regarding the report. On perusal of the report Modi may have decided that the list contained names that might cause him much embarrassment; so he sat on it. The second scenario could be that the report did not even land up on his table.
This must lead one to the style of work that goes on in the PMO. The PMO files are wrapped in the same red tape that does the job in all other government offices. And there is no need to explain what the red tape can do to a file. Maybe Raghuram Rajan’s report got slipped under one such wrapping and then saw no further light. Otherwise it is difficult to imagine that Modi did not act on such potential danger to the whole banking sector and the Indian economy if he had been made aware of the problem. Because the former RBI chief’s disclosure has brought so much embarrassment to the Modi government and provided lethal ammunition to Rahul Gandhi and his Congress party to stage a frontal attack on Modi, along with the Rafale deal and the escape of Vijay Mallya and Nirav Modi, promising to stay alive for a long time.
When governance is conducted through files, which is what happens in our system, the PMO is a jungle with its own rules and procedures, with the result that when something is lost, it is lost for ever; if at all it reappears, it will do so as something else. Strange things happen to files, complaints and proposals in the highly bureaucratic set-up. With the NaMo App and a slew of outreach programmes, there is a communication overkill, opening the floodgates to grievances, suggestions, proposals and what not. The Modi app itself has achieved nearly 10 million downloads. PMO has, in fact, become an information Leviathan, which is beyond the control of the limited bureaucracy it has access to. With the insistence of prompt response in all the cases, the quality of attention each case or file receives leaves much to be desired, leading to all kinds of faux pas and files getting directed to the wrong places. Who knows Raghuram Rajan’s report on bad loans did not meet with such a fate!
A colleague had a bitter taste of what goes on with cases referred to the PMO. A Subbiah, senior manager with IPA, was the victim of an ATM card fraud, when fraudsters used his Canara Bank debit card for effecting three fraudulent transactions, involving an amount of roughly Rs 25,000 about two years ago. After having exhausted all channels for a reversal of the three transactions and from going from pillar to post for about 20 months without any success, Subbiah lodged a complaint with the PMO. Prompt came the action, communications going out to various officials about the problem, but all this was not enough to bring relief for him. The problem was not really with the case, but in the way it was handled by the PMO bureaucrats. In their desperation for promptness, the complaint was referred to the Central Bank of India, although his account was with the Canara Bank.
It is not clear if the official concerned had meant to direct the case to the central bank as meaning the Reserve Bank or it was a mix-up between two banks with their name beginning with the alphabet C. But it gives an insight into the lackadaisical manner in which things are handled in the PMO. Prompt – the promptness must be noted – came the response from the Central Bank, clarifying that the complaint had nothing to do with it, and instead it was the Canara Bank. The PMO then ‘promptly’ closed the file on the ground that the wrong bank had been mentioned and accordingly sent an intimation to Subbiah. But in effect, it was like the PMO blaming the PMO for a mistake committed by the PMO – a perfect self-goal.
The issue with the PMO is not an isolated problem. It seems to be part of a systemic failure, the consequences of which span the entire government machinery. When the complainant approached the office of the Banking Ombudsman, it was the same haphazard approach shown by the officials with regard to the facts of the case. The Ombudsman got the name of the bank right, but messed up with the time stamp of the fraudulent transactions. While the Canara Bank transaction record attached with the complaint had the first fraudulent transaction taking place at 14:35:43 (2.35pm), the Ombudsman bureaucrats came up with a new transaction time of 12.26 pm, while keeping the other two timings intact as per the original.
How can an investigation yield any positive result when the recorded transaction time itself is wrong? By increasing the time-space factor by two hours, the Ombudsman squeezed in a time difference of two hours between the first and second transactions, giving the banks the scope to argue that the two transactions took place at two locations at a distance of two hours from each other. In reality, there was a difference of only two minutes between the first and second transactions, which the Ombudsman changed to two hours. Is the Banking Ombudsman working as an independent adjudicator or as an agent of the banks?
In fact, more intriguing is the Ombudsman’s observation that the complainant could have prevented the second and third transactions by acting on the alert for the first transaction. This raises a doubt as to whether the Ombudsman had deliberately changed the time of the first transaction to put the onus on the complainant and free the banks from any blame. The Ombudsman’s scheme of putting the onus on the customers, who have no means to fight the increasingly sophisticated methods of the scam artists and free the banks from responsibility, is most reprehensible.
If this is the way responsible institutions like the PMO and the Bank Ombudsman function when handling the affairs of the banking sector, only God can save our banks and their customers. And this is precisely the scenario painted by Raghuram Rajan in his response to the Estimates Committee of Parliament recently, in which he revealed the most irresponsible way our banking sector functioned. (IPA Service)