A FEW days ago, Subhash Chandra, a former Member of Parliament of the ruling party and the owner of Zee Group, which helped bring them to power, was hard to miss in the media. That was when the Insolvency and Bankruptcy Code (IBC), passed by the Indian Parliament in 2016 for the benefit of corporate giants, and the associated 'haircuts' came to light, at least to some extent. Some people were shocked to hear that 99.97 per cent of the dues simply vanished into thin air. Those who were shocked should remain vigilant. For the colossal loot coming to light at Bank of Baroda is bound to cause an even greater shockwave. Bank employees, especially public sector bank employees, have reached a state of numbness after hearing about such incidents repeatedly. Even our finance minister knows about it! How many such haircuts have bank employees witnessed under her stewardship? Recently, with a rather peculiar expression, she must have said, "Government bank employees should be cooooool," keeping all this in mind.

Witnessing such massive haircuts, the top officials of Bank of Baroda must have been grinning from ear to ear. Perhaps they even beckoned these multi-billionaire capitalists, saying, "Come on over here; it’s not just 90 or 99. At Baroda, it’s not just a haircut, it’s a throat-slit! Just like 'buy one, get one free' in the festive season, here you take a loan and get more than double the amount for free." That is why we said: do not be shocked.

‘HAIRCUT’ IN UAE

The place is United Arab Emirates (UAE) and the institution is NMC Health. It is reportedly the largest private healthcare company there, with its primary roots in the United Kingdom. Bank of Baroda had extended a loan of 253 million US dollars (approximately Rs 2,404 crore) to them. Transactions continued without a hitch from 2012 to 2020. However, in 2020, following high-profile corruption allegations, NMC Health collapsed. The bank filed a petition in a British court to recover the loan amount. A counter-petition filed by NMC against the bank was also pending. Following legal disputes, the Bank of Baroda reportedly reached an out-of-court settlement by paying 600 million USD (approximately Rs 5,700 crore)!

Even though the bank maintains that it did nothing wrong, the settlement, paying corporate administrators more than double the loan amount, was reportedly driven by the fear that its lapses would be exposed during the trial. In its last half-yearly financial review, Bank of Baroda’s profit stood at Rs 5,600 crore. It is astonishing that the bank chose to settle with a default borrower by paying roughly that exact amount. The settlement terms stipulated paying more than double the loan due! Official circles dismissed this as an 'isolated' incident.

THE KENYAN CASE

That is not all; now comes another news story. This one also happened abroad. In 2019 a loan was disbursed to Infinity Industrial Park, owned by prominent businessman Ashok Roopshi Shah. The loan was granted for the development of Infinity Industrial Park in Nairobi, Kenya. The amount was 1.976 billion Kenyan Shillings (equivalent to over Rs 140 crore). Infinity approached the Kenyan court, claiming that the company suffered specific losses due to contract violations and lapses on the bank's part. However, the bank failed to submit its defense documents to the court within the stipulated timeframe.

The bank argued that the lawyers who previously represented it failed to properly inform them about court orders or deadlines. However, the court rejected this argument. The court stated that despite being given a fair opportunity, the bank failed to comply with the court order. Consequently, the court issued a Default Judgment against the bank. The High Court of Kenya ordered the bank to pay 2.996 billion Kenyan Shillings (approximately Rs 221 crore) as special compensation to Infinity Industrial Park. To recover this amount, the Deputy Registrar of the High Court has issued a warrant empowering 'Moran Auctioneers' to attach and auction the bank's movable assets. In any case, while they did not pay more than double like they did for NMC, they certainly came close!

Through these extraordinary incidents of loot that have now come to light, the bank has handed over a total of Rs 5821 crore to two capitalists, whereas the bank was supposed to receive Rs 2544 crore! How can bank employees stay 'cooool' after hearing all this? One wonders if crony capitalists fleeing the country after taking loans in India has such a dimension as well. The high-ranking officials of Bank of Baroda responsible for all this certainly deserve to be considered for leadership positions in the IBC. It remains to be seen whether a brand-new law will now be introduced to ensure the payment of double the loan amount taken. They will probably have to invent another term for it, just like the 'haircut'!

It is banking sector unions that bring such daylight robberies out into the open. That is precisely why the Union government unilaterally violates agreements signed with unions, provoking employees and driving them to strike. We must recognise that protests in the banking sector have this dimension as well. Stronger, united protests must rise up against such daylight robbery policies.