The Modi government’s claim of a corruption-free regime is now in tatters with the Nirav Modi scandal coming soon after the murky Rafale fighter deal, the CPM said on Thursday.
Both Nirav Modi and Mehul Choksi are known to be close to certain BJP leaders, the party said.
Crony capitalism and the nexus with corrupt politicians is at the root of non-performing assets and the banking crisis in the country, the CPM journal People’s Democracy said.
The Punjab National Bank scam, the party said, is the most brazen and shocking case of defrauding in the history of Indian banking.
That the fraud has been going on since 2011 and peaked in the year 2017, indicates the scale and ease with which it was perpetrated, it added.
To make matters worse, Nirav Modi, his uncle and family members conveniently left the country in the first week of January before the CBI was called in to investigate the criminal wrongdoing, the Left party said.
The PNB scam has wider ramifications. Four other banks – SBI, Union Bank, Allahabad Bank and Axis Bank – also have exposure.
“The scam shows the severe implications of liberalisation and deregulation of the banking sector and the instructions to banks to pursue profit by any means,” the CPM charged.
Instead of holding liberalisation policies squarely responsible for the scams of the PNB type, chief economic adviser Arvind Subramanian has used the occasion to argue not just for increased deregulation, but for increased ‘private sector participation.’
He has argued for majority private ownership of PSBs, according to the party.
“The critics of PSBs rooting for privatisation would do well to take a look at the track record of private commercial banks.
Since Independence till 1969, 559 private commercial banks collapsed, leaving the depositors high and dry,” according to CPM.