Wednesday, June 20, 2007

Revival Package for Apex Bank-would the package indeed revive the bank?

When Dorjee Khandu took over the reigns of the state from Gegong Apang, he announced three thrust areas for his new government; 1. rooting out corruption from every corner, 2. streamlining of the PDS and 3. revival of sick Apex Bank. With public deposit base of Rs. 160 crores and bank going bankrupt, I wondered then, how the new government would go about reviving the bank. How would the bank repay the depositors amount? Would the bank be able to retain its customer’s loyalty, if at all revived? There were so many unanswered questions. Initial thought was that if the Government sincerely wanted to revive the bank, it would go all out in recovering Rs. 147 crores loaned out amount from the defaulters and initiate probe against those responsible for all this mess; to show that no one is above the law and can swindle away the public money just like that and finally would pay back the depositors money from the recovered amount to instill their faith in the lone state owned bank. And in this direction, the Government indeed started a recovery drive and decided to hand over the case to CBI, only to put all the initiative to cold storage after a while. May be the step was taken to subdue the initial outrage of the depositors and it gambled off well, I must say, with no much hue and cry from the depositors.

Now all of a sudden, the state government announces revival package of Rs. 225 crores to be obtained from NHPC (National Hydroelectric Power Corporation) Ltd.-a PSU that is involved in harnessing hydroelectricity at Arunachal Pradesh-as an advance to be adjusted against 12 % free power share in future to the much resentment of certain NGO. The Voluntary Arunachal Sena (VAS) questioned the logic behind such a move “to mortgage the future interest of the state” and demanded to know the basis that prompted the Union Power Ministry and NHPC to grant this special dispensation to the state Government. The Government termed this initiative as pro-poor and that revival of bank through this package would bring relief to the thousands of poor customers, who had suffered untold miseries since the bank became sick some 18 months ago.

No doubt, it would end the sufferings of poor customers who just don’t seem to know how to get back their hard earned money from the bank. But, would this Rs. 225 Crore revival package indeed revive the sick state owned Apex Bank? Does this package really ‘pro-poor customer’s’?

Let’s glance over the statistics. Out of this Rs. 225 Crores, the bank has to cough up about Rs. 160 Crores that it owes to its depositors and I’m pretty much sure that the depositor would not want to keep their amount further in the bank and would withdraw whatever amount is left in their accounts and close their accounts at the first given opportunity. Also, as I was told, Rs. 40 Crores has to be deposited as a security to retain license to run the bank. Then there are outstanding salaries to be paid to the employees of the bank and other office expenditures. So, where is the amount left to revive this sick state owned bank? Is the whole initiative just an eyewash? In case the bank wants to carry on its business, there is little scope that it would return all the money of the depositors. Then, how is this initiative pro-poor customer’s? How would it end the agony of the customer’s? I don’t have a clue.

And when the management of the bank and the politicians are hands in glove for this entire mess, I don’t understand the logic behind mortgaging the future interest of the state. How is this justified to use the revenue of the state to cover-up for their interest (to divert attention of public from loan defaulters) instead of putting the revenue in development of the state? Shouldn't they emphasize more on loan recovery than taking advance or grant, whatever, from other institutions? Or as someone has said, is it yet another exercise by the Government to make some privileged few a millionaire overnight again at the pretext of bringing relief to poor customer’s? Though the government has assured transparency, it is yet to be seen how transparent would the Government be, in dealing with this initiative.



    Yup, after observing all these things I think that the customers will be the loser at the last moment. The money which will arrive will surely be first distributed to the politicians and then the manager and the line will go on.
    The revival of the bank is just a question for name sake.
    The customers must be well aware of this. Though the customers who are well educated can get back their amount but the ultimate loser will be the poor people.
    The time has come for us to realise and revive the society and curb out the dirt from our society or else we will be eaten by these dirt.

  • tok

    it wont revive the apex bank but it surely would revive the bank balance of dorjee khandu which had fallen dangerously low after buying all the mla people ;-)

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