The PNB fiasco and the credibility of the bankers.

I don't want to get into the the nitty-gritty of the PNB episode. That is for the banking pandits, Supervisor such as RBI, CVC, Finance ministry etc to do the post mortem (what else they can do). Every thing is now water under the bridge.

What is more damaging and disturbing than the loss of the money which is involved in the fraud is the loss of credibility, the trust and the integrity of the bankers. The money can be retrieved but the loss of image in the eyes of the public is very hard to regain. The kind of cartoons, the kind of jokes that are flying thick and fast in social media makes a banker crestfallen, sullied and apologetic. Today's newspaper reports indicting the bank's officials of connivance with the perpetrators of the fraud for a paltry commission is an indication of the levels to which the integrity of a banker has slid, the surveillance weak and the vigilance slack.

This raises doubts if there is any nexus  between the top brass of the bank and the fraudster who has connections to the who is who of the politicians in power. At present and untill now they have found a scapegoat in a lowest grade officer. The amount involved is so astronomical that it can wipeout the institution itself if not recovered in good time. With what the Mallya saga, the huge NPA's story hitting the headlines regularly and people after taking huge loans leaving the county for safe heavens thus leaving the lenders high and dry and to fend for themselves, the banking environment has become increasingly hazarduous and repulsive. Citizens who used to respect the bankers have started to suspect.

We are in such an unenviable profession that - "We are damned if we don't give, we are damned if we give"
The esteem of the banking profession has taken a severe dent. All our contributions in nation building exercise, economic growth of the country and gigantic efforts at social inclusiveness have gone for a toss. Only the negative vibes created by a few unscrupulous bankers will remain in the memory of the public - after all human mind is wired to attract negative things fast.

K N Krishnan.

Technology and the frauds in Banking.

The incident which I am narrating dates back to nearly three decades when I was working as a clerk in a semi urban branch. Those were the days of manual ledgers. The best technological tool that was available was an instrument called TI banker which was used for balancing the ledgers. The other tool was a calculator.

A wrong credit of Rs. 15000 was given to an account with almost similar account no. The person has withdrawan the money and was not willing to pay back despite our repeated requests. A memo was served to me. After a few days a person from Regional office descended on the branch for enquiry. As usual I was manning the counters consisting of SB, CA, CC, ACC, ATL ledgers. I was moving from one end to the other like a tennis player who runs from one end of the court to the other. The man who has come for enquiry was observing my heroics sitting in the BMs chamber. After some time he came to me and introduced himself and asked me as to how I gave wrong credit. I was bit panicky and nervous. I was trying to explain that I was manning these many ledgers and it was a salary day and lot of rush was there etc. etc.

The man who had come for enquiry,  patting on my back, said - don't be worried. It is only the person who does work commits mistake. And I have seen you in action for myself. I am very much impressed by your hard work. Afterwards, I don't know what report he submitted and subsequently the amount was recovered and the incident was forgotten.

Look at the present scenario. The credits can come from anywhere. Internet banking, mobile gadgets using digital apps, NEFT, RTGS etc and he can draw from any corner of the country. It's all invisible unlike in the manual scenario. Everything happens in the thin air like a magic. Technology has enabled turning out mind-boggling volumes of transactions, the reach, the speed and has removed the barriers of timings making it a 24x7 and a 365 day affair. Technology has brought with it an equal amount of risk. A risk if not detected quickly may prove to be too costly. The mind boggling volumes we handle often tends to complete the work somehow and makes the level of vigilance required of the transactions difficult to exercise. This has made the job of perpetrators of frauds easier. The fraudsters are usually ingenious and clever enough to circumvent the safeguards and camouflage their trail. This demands presence of mind, knowledge of systems and procedures, a high level of alertness and alacrity on the part of the employee/officer in the frontline.

Prevention of frauds is a joint responsibility of the bank and the staff. For the bank , it is not enough if they just issue SOP, circular, instructions or guidelines. The job of the bank does not end there. There is no lead time to read, understand and seek clarification. Everything comes in quick succession and with immediate effect leaving the staff gaping at the happenings.

The frontline staff should be at least imparted specific training in fraud prone transaction areas. We  the Association, Union and SEWA too should sensitize /educate our members continuously of the need to be vigilant. The proverbial staff shortage, single officer /clerk scenario, and frequent deputations- an adhoc approach to staff shortage are some of the impediments. There is an urgent need to staff the branches reasonably and impart training in these vulnerable areas. Prevention is better than cure. The cyber crimes are a threat to the security of the bank. Thanks to technology. The climate of banking is risky and is becoming hazarduous.

K N Krishnan

The 2G judgement dtd. 21.12.2017

It was the fag end of the UPA - 2 regime. Manmohan Singh was under fire for being lame duck, incompetent to control the corrupt in his own council of ministers. L. K. Advani called him the week Prime Minister. His cabinet was already tagged with indecisiveness, non performing and corrupt. UPA - 2 was painted with brush called corruption. The hype, the melodrama and the buzz created around corruption and indecisiveness had already caught the imagination of the Nation. BJP aided by its Man friday in the office of CAG, and the media, leveraged the situation to its maximum advantage. It rode to the power partly because of this portrayal of UPA as scam ridden, corrupt, incompetent and Modi promised the moon to the the electorate if voted to power viz., eradication of corruption, bringing back thousands of crores of black money supposedly stacked in tax heaven and Swiss Bank abroad and also promised to the unemployed youth of creating lakhs of jobs etc., and the result was they believed and voted him to power with absolute majority, didn't keep him under the coalition mercy unlike Manmohan Singh. Manmohan Singh to a great extent was the victim of this coalition pulls and pressure because he was not a hard-boiled politician but an intellectual of high integrity.

I would now like to recall the words of Manmohan Singh uttered during relinquishing the office after the defeat -

1. Quote : ‘I am confident that someday history will judge me kindly’.

Unquote : These words sound rather apologetic but in reality, not and nobody took this seriously. But I now realise that Manmohan Singh has uttered these words not like a politician but he meant what he spoke.

Now let us peep into this 2G judgement. Before doing this, we have to be aware of the fact that Justice O. P. Saini, who pronounced the judgement was the most respected judge in Judiciary and he has handled many cases which were refused by other judges and hence it is said, he was the obvious choice for this case. He also, has the distinction of hearing the other high profile cases related to the Commonwealth Games.

2. Quote : Justice O. P. Saini while pronouncing the judgement Says - ‘ For the last about SEVEN years, on all working days, summer vacation included, I religiously sat in the open courtroom from 10.00 am to 5.00 pm, awaiting for someone with some legally admissible evidence in his possession, but all in vain. Not a single soul turned up. This indicates that everybody was going by public perception, created by rumor, gossip and speculation. I have absolutely no hesitation in holding that the prosecution has miserably failed to prove any charge against any of the accused made in its well choreographed charge sheet. There is no evidence on the record produced before the court indicating any criminality’.

Unquote : It was as if the judgement, while acquitting all the accused was in fact indicting the prosecution of failure to produce the evidence in support of the charges. Now let us juxtapose item 1 & 2. It perfectly reflects the apologetic (though they are not) words of Manmohan Singh - that history will one day judge me kindly.

There is a BJP government at the helm controlling the ‘caged parrot’ and ‘His Master's Voice’ as once told in exasperation by SC to CBI. The prosecution was by the agency which is under the direct control of Modi. Under these circumstances, the kind of judgement that has come out is back breaking to BJP. More than the judgement, the language used by one of the respected judges is more humiliating than the judgement itself. It is a severe loss of face to BJP. But BJP perhaps not so much ruffled by this judgment because their job is done. They achieved what they wanted by brandishing this corruption plank in 2014 election.

Rahul Gandhi was boasting in the aftermath of Gujarat election that Modi’s credibility has taken a hit. But that is inappropriate. But it is here that Modi’s credibility has suffered and he has lost the most potent weapon he has used against opposition - the plank of corruption. He can no more use it because he has overdone it and also abused it . Now BJP and Modi have to invent a new issue. Congress it appears has got a huge reprieve from this judgement. But it has still a long way to go and it is a long haul.

This judgement has the potential to herald a new permutations and combinations in the political spectrum at national level with Parliament election in 2019 looming large.

K.N.Krishnan.

The Gujarat verdict:

Now that Modi has done it again, this time in Gujarat. It is unfair to give credit only to Modi. The deadly cocktail of Amit Shah and Modi is the winner. Modi won the match in slog overs; he scraped through the victory; are some of the adjectives used for the story. But fact remains that BJP is the winner. Win is a win. Like in UP, this too was very crucial for Modi because it is his home state and more so the election was in a way seen as a reiteration of endorsement of his bold actions viz Demonetisation and GST. This election was important for one more reason. It was almost pitched as Modi versus Rahul Gandhi battle. And the Nation was watching with keen interest , the campaign trail of both the leaders and their narrative. No doubt it was one of the most intensely fought electoral fray. Congress could give some tough moments to Modi. It has given a run for the money to BJP. BJP may not admit but there was some anxiety and visible palpability on the BJP side too. The extent of paraphernalia the ruling party employed was an indication of this. Probably because the stakes were too high.

There was some disaffection of the traditional supporters of BJP due to demonetisation and GST. But the Modi’s charisma and his oratorical skills could able to triumph over that disenchantment. And it carried the day for BJP.

The arithmetic of Dr. Amit Shah and the chemistry of magician Modi proved too much for the debutant batsman Rahul Gandhi to clear the fence in the final overs. The execution of electoral operations to Clinical precision by Dr. Amit Shah and and mesmerizing professorial prowess of Modi aided by committed, hardworking and disciplined foot soldiers of BJP managed to overcome whatever the obstacles that were there in the path to victory.

Having said that, BJP though a winner has some causes for worry and Congress though the loser has some reason to cheer if the numbers are subjected to serious analysis. Pappu henceforth may be taken seriously by the rival BJP.

There are enough lessons to learn for both BJP and Congress from this election and both parties need to rejig the narrative and focus on the real issues affecting the common man than trying to divert the attention on emotive, symbolic and unproductive subjects.

The electoral story is getting curiouser and curiouser by the day. BJP is continuously displacing congress as a pan India party.

It appears that there is no leader or party that could pose challenge to BJP.  As of now only Modi and Shah can defeat themselves if the cocktail of power and pelf reaches their heads. Congress has to sweat it out just to be in the race.

K.N.Krishnan   

The steely determination

-In the Economic Times dtd. 01.12.2017, a headline caught my attention - that of Modi. He says,

I am aware of the big political price I will have to pay for the steps I have taken, the path I have chosen. I am ready to pay the price for better India.

This made me to sit up and take notice of the man who uttered these words.

These kind of words would not have come from an ordinary politician. It requires much more than a mere politician to make such a statement. It requires abundant courage, nerves of steel and unwavering belief and confidence in the task he has taken upon himself to make such a pronouncement. Rightly admitted by him, he has put his political career to risk by the bold initiatives of Demonetisation & GST.

Both are disruptive initiatives of humungous magnitude on a pan India scale affecting the lives of every citizen. They have not only disruptive of status quo but also drives the citizen from the comfort zone which he was so comfortable with for a decades together. No politician of ordinary make would have ventured into the kind of hazardous and polemical issues that too in his maiden term. This shows he is a man of different mettle. And one has to admit that he has put nation's intrest above his personal interests.

This enormous gamble makes him "stand out from the crowd". Apart from Demonetisation and GST other initiatives like linking Aadhar to gas connection, for opening a bank account, for registering property, the efforts towards less cash economy, digitisation etc., to mention a few are no less unpopular either.

He should not be distracted with controversial issues like beef eating, cow vigilantism etc and allow him to focus on more important and urgent issues bothering the nation.

I am reminded of the words of Mahatma Gandhi who said - "They oppose in the beginning, criticize later and accept finally ". Will these words of Gandhi become prophetic in case of Modi? One has to wait for some more time. The disparate & discredited opposition and a clear majority for his party would have emboldened him to embark on such non populous and bold initiatives to some extent. This is not to take away the credit he deserves. One has to "give the devil its due" .

How Gujarat will respond to all these, is what the nation is watching. Will it goes the UP way?  If it, then, Modi will become even more unstoppable which may be a good augury for the country.

K.N.Krishnan,

A political master stroke.

The Modi-Shah combine has done it again. After springing a surprise in the aftermath of UP elections by bringing a dark horse as Chief minister in Adityanath Yogi, the duo has repeated the same this time by nominating Ramnath Kovind who is a dalit as presidential candidate. This kind of decision which has national importance and has huge stakes for BJP would not have been taken without the green signal from RSS. There was an urgent need for BJP to shed its upper caste image which it has been identified with, with most of its leaders belonging to upper crust. At the same time there was need for it also to acquire a pro dalit image in the wake of Saharanpur atrocities on dalits and misdemeanors of over enthusiastic new crop of cow vigilante brigades. A makeover was required for BJP towards a pro dalit leaning with next big parliamentary election in 2019 in mind.

Be that as it may, the decision to nominate Ramnath Kovind is a master stroke. It is a great balancing act of the toughest order simply because, the two polar opposites of the ideological divide ie., the RSS and the dalit community have been appeased simultaneously. It is a well thought of idea. It has killed two birds in a single stone. It has caught the opposition completely unawares. It has made the opposition look like a rabbit in the headlights. The opposition is completely  clueless by this coup. It has sent the opposition coalition that was getting shape with the initiative of Sonia Gandhi into tatters. It has killed the coalition before it is born with Nitesh Kumar switching over to NDA. The rise of Modi like a Phoenix in Indian political arena is proving too much for the entire opposition. No one knows which tune this pied piper plays and when.

The narrative of this development is solely revolving around the caste which Ramnath Kovind belongs to. The other attributes of him like his vast experience as Supreme Court lawyer, his knowledge of the constitution, his personal integrity, his gubernatorial experience and his noncontroversial persona are not at all highlighted. This is not a good augury. The positive and strong attributes of a person who is going to occupy the highest constitutional position of the land should be the subject for discourse and not the caste to which he belongs. This proves that caste is an inevitable and ugly factor in Indian politics.

Now that BJP has hijacked the most wanted thing, it should not be content with mere tokenism. Politics of tokenism has run its full course. The dalits want something concrete and long-lasting contribution to the community than symbolic gestures which are ephemeral and will soon be forgotten. It has to cease the opportunity to prove to the world that it has better secular credentials.

Will Modi, the magician produce the result and not just the trick?

K N Krishnan.      94496 12446
Vice-president,
SEWA, Bangalore

The merger pangs.

The merger which was perceived rather apprehensively by all has happened. Now it is time to get down to brass tacks. Merger was nobody's choice neither anyone wished for it. It's a fait accompli. The immediate effect of merger is there for all to see. The bank which has an illustrious pedigree, which has an impeccable and most enviable record of making profit year after year continuously for more than two centuries has now suddenly incurred loss despite making a profit of five digits in crores in standalone basis. All the associate banks have posted losses thus bringing down the formidable banking giant to its knees. For a State Banker it is too much to digest and accept. An institution which was so assiduously built, nurtured and made to go from strength to strength by generations of dedicated employees is now stands emaciated, weak and poor. No doubt it has strong foundation, brand and mammoth size, but the same size if not handled deftly and efficiently may well prove to be a burden.

The degree of success of merger is most crucially hinged on how best we manage this size. The size and scale of geographies & business is the most challenging task staring at the face immediately. And of course the burgeoning NPAs is another major challenge for the bank which is not fully within the realms of the Bank. Because they are sometimes predicated by the external conditions of market, economy and government policies.

Left to State Bank itself, it was grappling with mounting and uncontrollable NPAs. Merger has rubbed salt into the wounds. It has made the situation worst. The success of the merger again at the cost of repetition will all depend how quickly and how deftly we come out of the morass and start leveraging the so called synergies and scale.

Seamless HR integration is another daunting task. Murmur less, noiseless and open acceptance of HR integration and striving for continuous improvement is another area of top priority for the bank.

The Best way of approach is to merge as many number of branches as possible, at the same time not to open further new branches. With the improved staff position of the merger of the branches,the bank can exercise better control over the operations. We are for a very long time managing with staff just enough for survival or even less. Many times we are managing on deputations thus living in Rob Peter to pay Paul syndrome. Post merger this kind of ham handed approach will going to be risky and hazardous.

With the disruptive technology that is being adopted almost on an ongoing basis and which has become the essential and integral part of of banking, recruiting new and young tech-savvy blood which can handle technological tools effortlessly and with ease may become expedient. Offering VRS for those at the fag end of their career may thus make sense. This will improve the age profile and also make economic sense.

Just my stray thoughts.

K.N.Krishnan    94496 12446 .