Does Indian Bank need more capital?

Indian Bank Officials Enjoy Backing of Tamil Nadu Politicians

Bhasin Is Guilty of Travelling Abroad at Government Expense Needlessly

Bhasin Is Guilty of Travelling Abroad at Government Expense Needlessly
Bhasin Is Guilty of Travelling Abroad at Government Expense Needlessly | Source

Indian Bank Lacks Professionalism

Is Indian Bank Adequately Capitalised?

Recently, Indian Bank’s CMD Bhasin stated that Indian Bank was adequately capitalised and it did not require any further capital immediately. The CMD also turned down a proposal from Life Insurance Corporation of India (LIC) to acquire 5% holding in the bank. One would think that these statements reflect the healthy financial position of Indian Bank.

But Indian Bank Came Up With $1 Billion Issue Last Year

But the same CMD last year came up with a proposal to mobilise $1 billion in the international market. I immediately posted an article in the Internet asking foreign investors not to invest in Indian bank. Why did I do that? Indian Bank is a discredited bank. It had indulged in scams and advanced loans against the norms in the past. At one point of time its entire net worth was wiped out. The government pumped in fresh capital and the bank was saved.

Indian Bank Lacks Professionalism

Indian Bank also lacks professionalism. While the other banks have clear cut norms for loans and advances, Indian Bank indulges in big advances, which do not meet the norms, simply because of extraneous considerations. Take for example its loan to East West Airlines. The airline company was eligible only upto a maximum loan of Rs.5 crore and even this amount could be advanced only after meeting the norms. But Indian Bank advanced more than hundred crore rupees to the borrower which went NPA (Non Performing Asset).

Indian Bank Officials Enjoy Backing of Tamil Nadu Politicians

Nobody can take any action against the Indian Bank management as the bank executives enjoy the backing of the Reserve Bank of India, which controls all the banks in India. In case of advance to East West Airlines, the RBI member was present in the Board meeting but kept silent. Why should the RBI keep quiet about the irregularities of Indian Bank? This is because the bank executives also enjoy good relations with the Tamil Nadu politicians who prevent the central government from taking action against the bank executives.

Is Indian Bank Adequately Capitalised?

Is Indian Bank Adequately Capitalised?
Is Indian Bank Adequately Capitalised? | Source

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AIBOC General Secretary’s Wife Did Not Repay the Loan

AIBOC General Secretary’s Wife Did Not Repay the Loan

Even in case of transfer of employees and officers, Indian Bank does not follow any rules and regulations. One bank officer Subbaiyan was posted on deputation to Kalambur branch for more than five years and he enjoyed deputation allowance each day of his working. The bank could have posted him on a permanent basis to Kalambur and minimised this expenses. But it did not do that. Indian Bank sanctioned Rs.18 lakhs to a trade union leader’s wife for purchasing a coffee estate in Karnataka against the norms. The AIBOC General Secretary’s wife did not repay the loan and Indian Bank coolly wrote the loan off as unrecoverable. Why did the bank not recover the loan from the salary of the AIBOC General Secretary? The RBI also did not question it as it also would have been a part of this scam. Who says that RBI officials are clean? They are the number one rogues in India. Even politicians are far better compared to the RBI officers.

Bhasin Is Guilty of Travelling Abroad at Government Expense Needlessly

After I wrote an article warning the investors not to invest money in the bank’s issue, Indian Bank abandoned the issue realising that there was no prospect of success in it. But Indian Bank came up with a toned down issue of $300 million. Again I wrote an article in the Internet warning investors not to invest in the bank’s issue. Knowing fully well that the issue would be a flop, the CMD of Indian Bank and other officers went abroad to conduct road shows. But this issue also failed miserably and the bank withdrew it. The government of India and the RBI should recover the expenses incurred by the bank CMD and other officers for conducting the road shows from the salary of Bhasin. RBI should not back him at least now.

Bhasin Is Good In Bluffing

After this, Indian Bank came up with a follow-up public issue for a much lesser amount in Indian rupees. I again wrote an article in the Internet about this also and warned the investors. This issue also did not sail through. After all these events, the Indian Bank CMD is telling coolly that Indian Bank is adequately capitalised and does not need any capital immediately. If Indian Bank does not need capital, then why did the CMD come out with issues not once or twice but three times, all resulting in failures?

There Are Many Good Indian Banks

Probably the Indian Bank CMD Bhasin is thinking that the Indian and foreign investors are fools and they will digest anything. Bhasin believes that tomorrow if he says that the elephant can fly in the sky, the gullible will believe that also! But let me tell the Indian Bank CMD Bhasin that you can fool some people for all the time, you can fool all the people for some time, but you cannot fool all the people for all the time. People like Bhasin bring disrepute to the Indian banking system. There are excellent Indian Banks like State Bank of India, Punjab National Bank, ICICI Bank, Karur Vysya Bank etc. But a drop of poison is enough to make the entire milk undrinkable. The central government should merge Indian Bank with Punjab National Bank and put a stop to these kinds of cheatings. Had I written these truths and sent to a newspaper, the editor would have torn it to pieces and thrown it into dustbin. Luckily there is a powerful medium called Internet through which I can have my views heard by even foreign investors.

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