DRI & ED scanner on large overseas remittances

by Harish Gupta, National Editor, Lokmat Group

DRI & ED scanner on large overseas remittances

Harish Gupta

New Delhi, Sep 12

The government is considering tightening of the Liberalised Remittance Scheme (LRS) and other legitimate routes for remitting money abroad. The government's re-thinking came after the probe agencies brought to the notice massive outflow of funds abroad during the past couple of years through legitimate routes. The Probe agencies, in a meeting last week with the Ministry of Finance and the RBI had raised concern over the unusual trend. 

The Directorate of Revenue Intelligence (DRI) and Enforcement Directorate  have detected outflow of money abroad in large amount to four countries namely; Thailand, Dubai, Singapore and Hong Kong

A number of foreign exchange dealers have come under the scanner for alleged misuse of Liberalised Remittances Scheme (LRS) of the Reserve Bank of India (RBI). An individual is entitle to remit $250000 abroad without any question being asked by the banks. But it was noticed by the agencies that huge chunks in tranche have been remitted to these four countries only. 

The ED & DRI have detected misuse of legal routes for remittance of the funds in foreign exchange which is considered  laundering of  money. Estimates suggest these countries have received Indian money of about Rs 20,000-30,000 crore in 2018 alone. Of this, Thailand alone has received Rs. 5000 crore.  

In order to avoid regulatory attention, Forex dealers often create fake invoices under the LRS thereby blurring the identity of many accounts a source pointed out. “we have issued notices wherever we have come across such irregularities “ the official quoted earlier said.

According to RBI guidelines, resident Indians are allowed to remit an aggregate sum of Rs 250000 per financial year for any permissible current account or capital account transaction under the LRS without any approval from central bank. However, the RBI routinely seeks clarification wherever technical lapses are detected, Penalties are also imposed.The ED has issued many notices under the Prevention of Money Laundering Act (PMLA) for unaccounted wealth parked abroad, after global leaks including he HSBC Swiss list and Panama Papers showing names of Indians. 

PMO to decide on how to use RBI's 1.76 Lakh Crore Wind-fall

by Harish Gupta, National Editor, Lokmat Group

PMO to decide on how to use RBI's  1.76 Lakh Crore Wind-fall

Harish Gupta

New Delhi, Sep. 5

Worried over fall in revenue collections due to economic slowdown, the Prime Minister’s Office (PMO) has pressed the pause button over utilisation of Rs 1.76 lakh crores wind-fall gain in its kitty.

Highly placed sources say that its not the Finance Ministry but the PMO that will take a final call on Rs 1.76 lakh crores received from the Reserve Bank of India (RBI) last week.

While the Opposition parties have alleged that the government will spend this money on meeting its rising fiscal deficit and unmanageable economic slowdown, the Finance Ministry has maintained a studied silence on the issue.

The RBI transferred a record dividend of Rs 1.76 lakh crores out of its Rs 10 lakh crores surplus funds on the recommendations of the Jalan committee report.

Sources aware of the goings-on in the government said that top officials of the finance ministry may shortly meet mandarins in the PMO soon to work out the modalities. The process has somewhat been delayed as the PMO is undergoing internal changes. With Principal Secretary Nripendra Mishra demitting office within the next one week and other six senior officials arriving in the PMO, things are settling down.

There is a thinking that the funds be put to use into stimulating the sagging economy and infrastructure spending rather than doling out bonanza to handful of sectors.

Union Finance Minister Nirmala Sitharaman said recently that the government was yet to decide how to utilise Rs 1.76 lakh crore. “I can’t talk about how to utilise it now. We will take a call and then let you know,” she had said while replying to a question at press conference in Pune. She held a marathon meeting with the Industries representatives yesterday and assured them corrective steps are underway.

The PMO's new team is busy preparing a blue print for reviving the economy and bridge the revenue shortfall and cut down on borrowings.

Ends

Modi considering Farm Loan Waiver Scheme

by Harish Gupta, National Editor, Lokmat Group

Modi considering Farm Loan Waiver Scheme

Rs 2 lakh crore bonanza on cards to farmers, weavers, artisans, middle class

Interim budget will be full of free-bees

Harish Gupta

New Delhi, Dec 20

After debunking the farm loan waivers by the Congress governments at the Centre and states, Prime Minister Narendra Modi is seriously toying with the idea of giving massive sops to the farm sector including a loan waiver scheme.

The PMO is of the considered view that loan waiver schemes had helped the parties winning the elections. It was tried by the VP Singh-Devi Lal combine during the 1989 Lok Sabha poll campaign and helped immensely. The final cost to the Central Exchequer in 1990 was Rs 10,000 crores. In 2008, the Manmohan Singh government waived the loans for farmers to the tune of Rs 52260 crores and returned to power.

Highly placed sources in the PMO say that data is being collected on a war-footing basis to identify the number of farmers in each state who will require National Loan Waiver benefits. The loan waivers worth more than Rs 2 lakh crores crores to send a strong signal to the farming community that the Modi government is serious about their well being and taking them out of the distress.

The government has already asked the RBI interim dividend and may also seek extra money within the next one and a half months. A high powered committee will be constituted shortly to lay down guidelines as to how much money RBI will need in its reserve. This committee will be asked to submit its report within 20 days and pave the way for massive transfer of funds from RBI to the government.

Though the BJP leadership has not undertaken a detailed review of the recent losses in the state assembly polls (or not shared reasons of its defeat with the media), it is under pressure to give doles to the various sectors before the Lok Sabha polls are announced in February-end March-first week.

It has been decided that loans will be waived for the weavers community and artisans which are mostly in UP. Similarly, the middle-class will be given some tax rebates. The PM has already announced massive GST relief brining tax regime from 28% to 18%. This will hit the government by another Rs 20000 crores a year. This loss can be off-set if the buoyancy in the economy comes soon.

Those facing GST penalties and other problems may also be given one time amnesty so that they can get rid of harassment.

In order to garner support from the 263 million farmers and their many millions dependents, the Modi government would move towards waiving loans to create a positive climate.

The party leadership feels that Modi's personal graph has not been dented even after the loss of power in three Hindi speaking states. Therefore, immediate relief measures even if they are to the tune of Rs 2 lakh crores or above, could turn the tables nationally in favour of BJP for the Lok Sabha polls.

Insiders say nothing less than the massive doze of concessions to all the sections including the MSMEs, GST, Farmers, weavers & Middle-class will work in favour of Modi.

Economists including NITI Aayog have already cautioned that farm loans waivers would widen a fiscal deficit which has been capped at 3.3 per cent of its gross domestic product (GDP), or Rs 6.24 lakh crore.

Ends 

Caution, Chowkidar is asleep

by Harish Gupta, National Editor, Lokmat Group

CAUTION, CHOWKIDAR IS ASLEEP

So, with the Nirav Modi (NiMo) and Mehul Choksi scam hitting Rs 11,400, and still counting, the country seems to have doggedly refused to stray from its path of letting the financial systems open 24X7 for plunder. It might have begun with the Nagarwala case in the high noon of the early Indira Gandhi era. It could have evolved into the Harshad Mehta (early 1990’s) and Ketan Parekh (early 2000’s) saga, in which the two worthies in effect looted banks to fuel stock prices to dizzy heights. And, with the financial system being the platform on which the corporate system rests, the systemic destruction was in public view in 2009, with the brazen fiddling by B. Ramalinga Raju and associates of profit and loss figures of the erstwhile Satyam Computers, in cahoots with PriceWater house Coopers, the world famous auditors.

In fact that was a major reason why voters thought they’d had enough of it, gave an almighty shove to the Congress-led government,and welcomed a regime led by one who proudly promised : na khaunga na khane dunga(“neither will I steal nor will let others steal”) and will be your Chowkidar (Guard) for 24X7.

However, the two diamond traders’ recent escapades, in obvious collusion with a gaggle of officials of Punjab National Bank and their unknown patrons, has turned Prime Minister Narendra Modi’s much-quoted pre-2014 assurance into a bizarre mockery. And the dimension of the theft too is poised to leapfrog over time, as more claims accumulate with PNB due to the fraudulent Letters of Undertaking (LoU) issued to banks abroad in favour of the ‘diamond duo’. Till last year, the duo could easily float below radar as they had a key ‘friend’, Gokul nath Shetty, PNB's Deputy Manager, who had enabled them to “roll over” the credits after the termination of the statutory 90-day period. The trick of the trade lay in circulating the LoU over SWIFT, the secure telecom network that connects banks the world over, without informing the bank’s own Core Banking Solutions (CBS). It is like your partner withdrawing cash from a joint account without informing you.

Or something even more serious! Because the rogue partner can cheat you only to the extent of your own net worth. But a PSU bank is owned by none other than the President of India. No government so far has agreed to bring its stake down to below 50 per cent. So it remains a ‘sovereign risk’ which, if left unchecked, has the potential to recoil on the exchequer. 

The question is: why did a government wedded to the promise of “na khane dunga” look the other way when NiMo’s companies were splurging on unexplained and undeclared bank credit for over seven years? How did Shetty continue in the forex department of PNB despite a Central Vigilance Commission rule that the incumbent in sensitive post should be transferred after three years? Why Shetty's three transfer orders were canceled? What were the bank’s army of external auditors doing? And where were RBI’s team of hundreds of inspectors who have the powers to inspect any branch, anytime and any account ? Why was the Modi administration so oblivious of  daylight robbery in its own banks?

Well, it can be attributed to the typical Indian lethargy to fight corruption. But there is yet another explanation why Nirav Modi's shenanigans went unnoticed under the NDA for almost four years. How will the ‘bigger Modi’ assuage his critics who point at his group photo with the ‘little M’ at the WEF conclave in Davos, taken days after the CBI had filed an FIR against the businessman? Besides, Nirav Modi is the brother of Nishal, who is son-in-law of the Salgaokar family of Goa, closely related to the Ambanis, the country’s richest clan. The CFO of Nirav’s holding company being grilled by CBI is nephew of the late Dhirubhai Ambani, the Reliance founder.

In the past, the likes of Harshad Mehta and Ketan Parekh defrauded the  nationalised banks and played havoc in the share market because of systemic inadequacies. Some of these flaws were indeed fixed, which is why the capital market today is fully screen-based, with adequate disclosure norms in place. The corruption-prone badla system was replaced by a mature derivatives market. But the banking sector remained largely untouched, except that Raghuram Rajan, as RBI Governor, initiated the diagnostic steps. These showed how deep the rot had gone. The bad loans of public sector banks were 4.4 per cent in March 2014 against 2.09 per cent in 2008-09. After the change in government, as Rajan was forcing the banks to own up their losses and today the figure of NPA is over 14%. Rajan didn't have a cordial relationship with the Modi government is too well known. He went, and even the disclosures stopped. Choking under bad loans, the PSU banks began putting squeeze on total advances last year, for the first time in two decades. The banking sector’s bad loans, together with loans being rolled over and under restructuring, have hit a dizzying Rs 10 lakh crore, which is 3X the country’s tax revenues. If one looks at only PNB, its NPA has shot up three times between 2014 and 2016, from Rs 18,800 crore to Rs 55,818 crore. And roll overs are tubmling out of the closet of one bank after the other.

It is clear that somewhere someone is involved and guilty of connivance, ignorance or humungous lapse. Narendra Modi handles all appointments, transfers, postings in government & banks. He reads every complaint and mail sent to him and responds as well. His Man Ki Baat is a testimony to his actions. He gave a dressing down to the jewelers at a huge conference in 2015 and imposed taxes on them which no PM could dare in the past. But did he measure up to the job of chowkidar (sentry) when it came to guarding banks' coffers ? Pollsters say his ratings remain high. But as another election draws near, the chinks in Modi's armory are clearly showing.

(The author is National Editor, Lokmat group)

A TOUGH ACT TO FOLLOW

by Harish Gupta, National Editor, Lokmat Group

In Britain, the law to register a joint stock company, instead of waiting for a Royal charter, was enacted in 1844. The same year saw the Joint Stock Companies Winding-up Act that could bring a company to an end and liquidate the assets. 

India inherited so much of its financial processes from its colonial masters yet it remained a laggard in the handling of failed businesses, thus crippling the banks’ resolve to find new borrowers. Sadly, having an economist prime minister trained in Britain didn’t help much. In 2014, India’s toxic loans stood at Rs 13 lakh crore ($195 billion), or a good $20 billion more than the GDP of New Zealand. The government of Dr Manmohan Singh collapsed under a cloud of controversy about sweetheart deals in licences for natural resources, and the consequent ruining of banks. 

This is the background to Prime Minister Narendra Modi’s daring Insolvency and Bankruptcy Code 2016 (IBC) which ought to have come a couple of decades earlier—but better late than never. It is the first step in clearing the mess in which the economy is stuck, in which 240 of the top 500 borrowers belong to the stressed or Elevated Risk of Refinance (ERR) categories. These 240 entities, in their turn, hold about 42 per cent of the total outstanding debt of Rs 28.1 lakh crore. Rather than criticising the Prime Minister for “going slow” on reform, it is time his critics asked if the economy could be back in motion without unclogging the money pipes to and from the banks. 

However, the IBC architecture is complex. It requires armies of Insolvency Professionals (IP) National Company Law Tribunal (NCLT) and the regulator, the Insolvency and Bankruptcy Board of India (IBBI). These professionals will be directed to takeover a troubled company and run its affairs with as much authority as its CEO. And they will of course remain in consultation with a Committee of Creditors. But it is the IP who has to decide the way forward—with either a saving formula (“resolution”), or liquidation. It is different from the existing (and ineffective) business rescue or winding-up procedures, like BIFR and SICA. What is lacking in them is the speed element, which puts IBC in a different league. After being assigned by IBBI, the Insolvency Professional must send his report within 180 days, with an extension of 90 days if the creditors have no objection. But that must lead to the final solution. Its novelty is charmingly spectacular in a city like Mumbai where the pre-Independence textile mills, all falling irretrievably sick in the Sixties, took almost half-a-century to let their creditors sell off the land for residential buildings, offices and shopping malls. 

Led from the front by the Prime Minister, his administration’s urgency to clean up the credit market is evident from the beginning. Last week itself, the Reserve Bank of India, with prodding from PMO, sent a list of 12 stressed accounts to bankers for urgent resolution through IBC. The holders of these ‘dirty dozen’ accounts, with names as familiar as Jyoti Structures, Monnet Ispat, Bhushan Steel and Essar Steel, account for 25 per cent of the current gross Non-Performing Assets (NPA). In India, as in Britain, the process of insolvency resolution has historically been biased on rescue. But, with a rigid time line for resolution or liquidation, IBC leaves no room for dodgy promoters to keep dawdling over airy-fairy rescue plans. In a way, it wouldn’t have allowed liquor baron Vijay Mallya to spend years in India on the excuse of trying to ‘save’ his bankrupt KingFisher airline, and then flee to England. 

The IBC is superior to anything similar in existence in the past. It exhibits a clear understanding of the real-life situations prevailing for asset quality to deteriorate in stages, from doubtful to outright bad. The PSU banks, host to most of the stressed assets, are manned by a crop of cautious bankers who’d give the difficult borrower one more chance before reporting his account to RBI as an NPA. Such extreme step also involves a personal risk. Sniffing a banker-client corrupt linkage, the CBI may knock at the very banker’s door one day. Under the new IBC, however, criminal proceedings are not permitted to interfere with the resolution of the existential problems of an insolvent company. This should give bankers the spirit to report a loan that doesn’t seem right before it gets rotting. 

Still, what is not clear yet is the government’s readiness with the IBC architecture. While IBBI, the regulator, may develop the required personnel and skill sets with time, the NCLT will have a tough time. Its mandate is to hear cases earlier dealt with by the Company Law Board (CLB), in addition to the new IBC cases. In March 2015, the CLB had 4,200 pending cases. All this will now go to NCLT, plus 4,000 IBC cases annually. The latter number may multiply with old BIFR and Debt Recovery Tribunal (DRT) being channeled to NCLT. This may raise workload on the NCLT benches quite sharply, with its solution being large scale fresh recruitment of NCLT judges, many of whom are required to be technically knowledgeable. 

The Indian business professionals—executives, shareholders, lawyers, finance experts—have a mindset coloured by the past culture of being reckless with bank loans. It led to the joke of a borrower visiting his banker in a rickety Maruti 800 to negotiate a loan, but, after defaulting, returning to the bank to restructure the debt, but in a Mercedes this time. One hopes Modi’s IBC will restore parity between the size of the debt and the length of the defaulter’s car.

Come back oh, charkha

by Harish Gupta, National Editor, Lokmat Group

If you are running marathon but joined the race an hour or so late, it is likely that you will reach the final post 26 miles away some time. But the competition will certainly close before that. A similar fallacy is staring India. When government"s financial data were released last week, and it was found that the Gross Domestic Product (GDP) had grown 7.1 per cent in the April-June quarter, against 7.9 per cent in the last quarter of the previous fiscal, there was dismay and consternation all around.

TOO MUCH SWAGGER

by Harish Gupta, National Editor, Lokmat Group

The government of Narendra Modi is soon to complete two years, which, if compared to a human life span, is like someone reaching 35 years. In 2014, Modi's NDA swept to power on the crest of great popular expectation. Yet, in what can be described as its late youth, the Modi government still fails to inspire confidence; rather, it resembles a dissolute person who refuses to learn from experience.

As it approaches 'midlife', it becomes more and more brazen with institutions and rules. Much of it centres on Modi's hatred for Congress, the main opposition party, beginning with his invective that he'd like to see a "Congress-mukt Bharat". His irritability to the presence of Congress even in far-flung and minor states was evident last year when the Union Government, assisted by the loyal Governor of the border state of Arunachal Pradesh, laid out an elaborate plan to topple its Congress government with the help of 'dissident' MLAs. The plan succeeded but not without the smoke and mirrors of a conspiracy— complete with the Governor attempting an assembly 'floor test' in a five star hotel, the Union Cabinet holding meeting on a Sunday to recommend President's rule under Art 356, and it being revoked as soon as Kalikho Pul, the main dissident leader, had obtained the required number to form the next government. A last word on this adventurism is yet to the written as SC ruling is expected anytime.

After 'liberating' Arunachal from Congress rule, the Modi administration turned its attention to Uttarakhand where it turned out to be fatal this time round. At the end of a 50-day-long tug-of-war between Uttarakhand's Congress chief minister Harish Rawat and the Centre, it was Rawat who had the last laugh. Following a powerful intervention by the high court, and a robust judgment of the Supreme Court that stuck to the knitting of the S. R. Bommai Case (1994, it held that promulgation of Art 356 is subject to judicial scrutiny), Rawat not only regained his chief minister's seat but dealt a blow to BJP powerful enough to put its nose out of joint.

Modi's obsession with the Congress is now affecting his clarity of judgment on issues that are less personal and of more immediate concern— like a stagnant economy, a retail inflation which is proving more stubborn than earlier projected, and a banking system reeling under NPAs. It is at this juncture that Subramaniam Swamy, BJP's one-man army against the Congress, has entered the fray. He has begun a vilification campaign against RBI Governor Raghuram Rajan. He is known as a crusader against inflation and respected globally for his nose for coming economic crises. But Swamy's vitriolic outburst against Rajan, that he be "sacked", is both offensive and puzzling. Why did the Prime Minister, who had seemed to hold Rajan high in his personal estimation, did not discipline Swamy? Is it because Swamy was targeting a man put on the high pedestal like RBI chief, by Congress? If so, it is a pity because BJP lacks economic talents and Rajan is not only a renowned central banker but a tough sheriff to control the loot of banks by crony capitalists. 

However, having seen Congress humbled to 44 Lok Sabha seats after the 2014 general election, there was little need for even a ruling party wedded to a 'Congress-free India' to act in a tizzy. With 57 Rajya Sabha members having retired last week, 14 of them from Congress, the party's strength in the Upper House may even dip low enough for BJP to finally draw level with it. Besides, Congress is out of power in all but six of the 31 states, while two others, Kerala and Assam, are poll-bound. Instead of lying low for the present due to tactical reasons, the administration is actually giving local & regional parties enough provocation to rally with Congress in future. A recent example of a past critic of Congress turning a new leaf is the ease with which the two BSP members of the Uttarakhand assembly hugged Congress MLAs, their rivals, before the floor test of Rawat's majority at the Dehradun assembly. 

Modi and his advisors are perhaps hoping that Congress president Sonia Gandhi might get mired so deep in the Augusta-Westland controversy that, in a parliament with a near-silent opposition bench, it will be cakewalk in the next three years till 2019 poll. Pro-Modi activists are perhaps drawing parallels from recent history, particularly with the effectiveness of the 1989 campaign against the late Rajiv Gandhi in the thick of the Bofors payoff allegations. But the inherent reason for the Congress rout under Rajiv lies not just in the scam report but in the more compelling fact that the party was without any major ally when the crisis was taking shape. Despite getting a massive mandate of 411 Lok Sabha MPs, Rajiv Gandhi’s advisers allowed the Left to join hands with the BJP and messed up every issue; be it Shah Bano, Babri, Sri Lanka’ Tamilians or Bofors. The final nail in the coffin came from forces within Congress.  

BJP under Modi is also drifting towards a similar alienation. In Bihar last year, and West Bengal now, Congress is winning friends. If BJP can put up an impressive performance in Assam as the results are declared this week, it will be due to its alliance with AGP and Bodoland People’s Front. In the Uttar Pradesh election next year, the chances of a Bihar-style anti-BJP mahagatbandhan depends on just how much Modi can avoid confrontation. On the day of election, voters after all prefer achievers, not swaggerers and hyper-combatants.

Chit Fund biz is history

by Harish Gupta, National Editor, Lokmat Group

* Hundreds of companies shut down as agencies go after them 

* West Bengal, Maharashtra top the list

Harish gupta

New Delhi, Mar. 26

A virtual war seem to have been declared against Ponzi companies across the country including Maharashtra.

According to information available, the RBI has been conducting special probe into the complaints involving 104 companies. The RBI has told the government that these companies are suspected to be holding public deposits. Other probe agencies such as CBI, Enforcement Directorate, SEBI & Special Fraud Investigation Organisation (SFIO) under the Corporate Affairs Ministry have been conducting separate investigations into Ponzi/chit fund companies which have duped thousands of poor investors.

According to information collated from various agencies, the total amount calculated so far is Rs 33141 crores. In Maharashtra, there are at least 18 companies under investigation where action has been initiated involving an amount of Rs. 4697.67 crores. 

These agencies estimate that the amount of scam would be of a very high order once the probe is completed. Apart from RBI, the SFIO is conducting separate probe.

The RBI has been conducting probe into the complaints involving 104 companies. The RBI has told the government that these companies are suspected to be holding public deposits. 

Maharashtra Companies                          (in Crore)

Seamless Outsourcing LLP (3 Companies)                 3494

option one industries Ltd                           1000

Vishwamitra International Infra                           106.75

Cell Industries                                   15.61

Wasankar Wealth Management                           13

Equinox Infratech                                    12.47

Angel Group                                   12

RBX Land Developers                                   11.98

others (8 companies)                           31.86

Total                               4697.67 

According to Finance Minister Arun Jaitley, the SFIO was assigned the task of probing 164 cases against these companies. Probe into as many as 78 companies has been completed until December 31, 2015 while investigations are on against 46 companies. The Finance ministry sources said probe into major offenders such as Saradha, Rose Valley, Seamless, I Core and other groups has been completed. The probe against other companies will be completed within the next couple of months. A Computer Forensic Lab has been set up in SFIO for analysing the database of the companies under investigation. The investigations into the Punjab-based Pearl Group of companies are still in progress. The amount involved is said to be nearly Rs 45,000 crores.

The Directorate of Enforcement has registered 57 cases under the Prevention of Money Laundering Act, 2002 (PMLA) and the CBI has registered 65 cases during 2014-15. The ED has attached assets worth Rs. 1133.25 crores and prosecution launched.

Chit Fund biz is history...

Ponzi Companies in the Country Rs. in Crore

Rose Valley Realcom Ltd. (19 Companies) 10281

I croe group (12 Companies)          7375

Seamless Outsourcing LLP (3 Companies)  3494

Saradha/Global Automobiles Ltd. (14 companies)  2394

Saradha/Basil Express Ltd. (5 companies)  1721

URO group                  1500

Alchemist Holding Ltd          1088

option one industries Ltd          1000

Unipay2U Production Pvt. Ltd. (4 Companies)   792

NVD Solar                   595

Artha Tatwa                  500

Seashore Group                  478

SGI Research & Analysis          494

Annex Infrastructure          200

Vishwamitra International Infra          106

Rimel group                 100

Others (51 Companies)               1023

Total             33141 

The crack down that began with the SEBI action against the Sahara group two years ago has now been expanded to hundreds of companies in West Bengal, Jharkhand, North Eastern states, Odisha etc. The government has now set up State Level Coordination Committee (SLCC) for greater coordination between RBI, SEBI and other agencies as chit fund companies are governed by states. 

Though the Maharashtra government had estimated that the amount involved is more than Rs 10,000 crore, the central agencies' estimates are based on cases registered with them. 

Incidentally, the BJP MP Kirit Somaiaya has been spearheading the campaign against chit fund firms in the state and claimed the scam in Maharashtra alone was to the tune of Rs 40,000 crore.

WHO KILLED THE BANKS?

by Harish Gupta, National Editor, Lokmat Group

Next week, as Finance Minister Arun Jaitley, presents the 2016-17 budget, the fear of many trillions of stressed assets hangs on him like Damocles’ sword. It is a real fear, not an imaginary one, like that of Islamists and Maoists hatching sinister plots from the JNU campus. The ghost of bad loans by banks was stalking the government for quite some time but its enormity became evident after Reserve Bank of India Governor Raghuram Rajan ordered an asset quality review last year of the 40-odd PSU banks for the two successive quarters ending in December 2015 and March 2016.