UCO BANK - BOLD , WELCOME STEP OF 'NAMING AND SHAMING'
By Ruma Dubey
We have always carried this grouse – of banks treating us differently from the big wigs or the money bags. It is a clear case of discrimination that someone like Vijay Mallya scoffs at his debt and banks, when he is amongst the biggest defaulters in the country today. Yet, banks could not do much. But if me and you miss even one EMI? Banks will make living a nightmare!
Call is sadistic pleasure or whatever; it was heartening to see one bank finally having the guts to take on the might of the big moneyed guys. UCO Bank is setting a trend. It issued an advertisement in the newspapers, with a picture of Nitin Kasliwal, CMD of S Kumars Nationwide Ltd (SKNL), who is the guarantor of a Rs 110.07-crore loan taken by Reid & Taylor. The company had defaulted on its Rs.110 crore debt and UCO Bank has taken this bold step of naming and shaming one of the the head honchos of India Inc. UCO Bank went ahead and also cautioned other banks against dealing with the company.
The bank stated in the advertisement that it was more of a notice, wherein despite sending scores of reminders, the company had not liquidated liabilities of the bank. UCO Bank has already classified the account as Non Performing Asset. This ad was not a legal notice but mainly an attempt by the bank to bring this to the notice of others, so that they too become careful whilst dealing with this group.
A few days ago, SBI had published a similar ‘name and shame’ picture of five of its defaulters. But these were small guys and surely, SBI could have filled up the entire newspaper if it had decided to put the picture of its list of ‘defaulting’ big guys! It did not have the guts but a much smaller bank has shown the way.
It is not just UCO Bank but many others – IDBI, Corporation Bank, Bank of India, amongst others who are facing the same situation with the group. All (except IDBI) are mulling legal action though none of them took the extreme step of shaming the promoter and his company. Surely UCO Bank would have been forced to take this step when all other passive coercive actions would have failed. But the big change here – earlier when pushed to the wall, banks used to bury their face in the wall and mark it down to NPA, taking a hit on its balance sheet. All banks still do that. But this is for the first time that a Bank has shown a new way of probably pushing the big defaulters to the wall!
Why not? Yes, when promoters of companies default, the banks should break free of their ‘political’ shackles and make full use of the given right to freedom of speech and expression. If banks can send hooligans to recover money from small house owners, stick large notices on doors of even smaller homes, surely bigger action is required when companies default on such large amounts. Our Finance Minister had told the banks famously that they should act against rich promoters of poor companies. The barb then was directed against Vijay Mallya but it extends to all the others too.
Yes, the Indian banking is largely discriminatory. Someone like Mallya gets a waive off for crores of rupees of debt while people like you and me, would not get a waiver for even one single paisa. How is this fair? A flamboyant industrialist gets treated like a ‘responsible’ citizen when he has dodged taxes, not paid salaries, not paid for fuel and yet, goes around spending money on irrelevant purchases? Money power alone works, especially in banks.
Emboldened by UCO Bank, other banks have also started talking about similar actions. Well, if that happens, for once, the newspaper might start getting interesting!
PS: Newspapers are supposed to tell us the truth, ironically, to tell the truth UCO Bank had to issue an advertisement!