India’s Banking Sector Needs A “Wash Basin” Visit

Is India’s public sector banks’ inbuilt statutory policing body – the Central Vigilance Commission [CVC] – by itself its biggest malaise?

Has such a sad state of affairs resulted in non-performing-assets [NPAs] rising alarmingly to the tune of roughly Rs.4.4 lakh crores [$66 billion]?

The answer to both the queries are in the affirmative – because of one man – TM Bhasin – the third in the CVC’s hierarchy – meant to safeguard the interests of the nation’s banking through effective policing.

Bhasin is occupying his post with the brazenness of a hardened criminal.


Bhasin took charge as the VC on June 11 2015.

The earlier CVC had recommended that Regular Departmental Action should be initiated against Bhasin.

The Supreme Court is seized of the matter against Bhasin since July 2015.

Excerpts from averments in a public interest litigation [PIL] being heard in the Apex Court against Bhasin:

  1. Bhasin was indicted in a detailed inquiry by the Central Vigilance Commission in 2013 for forging and tampering with appraisal report of Malay Mukherjee – a former General Manager of the Indian Bank. [1]
  2. Despite this, Bhasin managed to get elected as the Chairman of Indian Banks’ Association in 2014!
  3. Former Union Minister and currently a senior member of the ruling party Dr Subramanian Swamy had written a strongly worded letter to the Prime Minister on 11.06.2015 stating that charge against Respondent No. 3 (Bhasin) is “very serious” and the recommendation of the selection committee to appoint Respondent No. 3 as VC must be withdrawn. He said “finding of moral turpitude by CVC of Bhasin makes him unfit to keep the position of Vigilance Commissioner.
  4. The Central Vigilance Commission recommended action against current CMD of Indian Bank – TM Bhasin as early as August 2013 asking the Union Finance Ministry to comply.
  5. Bhasin is being relentlessly exposed since 2011 from the time when he held the position of Chairman and Managing Director, Indian Bank. Besides the other offences mentioned above, Bhasin had allegedly collaborated with the nation’s enemy Dawood Ibrahim to ruin Bank of Baroda and thus destroy the Indian financial system.
  6. Bhasin’s target was reputed banker SS Mundra, currently a deputy governor in the Reserve Bank of India [RBI]. Bhasin wanted the post and reportedly managed to keep Mundra waiting for several months. Mundra’s elevation to RBI became possible after Dr Kamalesh Chandra Chakrabarty – another ex-Indian Bank head quit his RBI post 3 months ahead of schedule. Chakrabarty has an impeccable record as a banker.[2] He had spent most of his years in Bank of Baroda.
  7. The evidence against Bhasin has been piling since 2011!

Bhasin’s protector-in-chief are said to be Union Finance Minister Arun Jaitley and RBI boss Raghuram Rajan.

The results are there for all to see. The Supreme Court has slammed the financial sector – with special emphasis on RBI.

“RBI is supposed to uphold public interest and not the interest of individual banks. We have surmised that many financial institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny,” said a bench comprising Justices M Y Eqbal and C Nagappan.

The CVC and one of its mainstays Bhasin are systematically targeting banks and bankers who, it is believed, are on his hit-list. One of them is – Bank of Baroda!

Rajan is propriety personified in his public utterances.

“We have to go after corrupt bank managements as well as corrupt promoters,” Rajan said. “There is no doubt that we need to do it. We do not have enough teeth. There are these promoters who have diverted funds. “Diverted fund” is a euphemism. I would say plainly that they have stolen the funds, and we cannot go after them. It takes too long.”

What has it resulted in?

According to official RBI communiques, the total write-offs in the 133 scheduled banks in India include a huge chunk of technically written-off accounts. The trotted out reason is: “After technical write-offs, there is no incentive for banks to pursue recovery.”

Rs. 1,14,000 crores worth ‘bad loans’ have been technically written off during the last 3 financial years (2012-13 to 2014-15). The write-offs exceed the previous nine years’ dubiously written off debts.

The Union finance ministry and NITI Aayog have separately pitched for setting up a government-owned asset reconstruction company to take over banks’ bad assets. It could result in banks conducting non-banking commercial businesses – starting with dead losses! It could also wipe the dirty slates of bad borrowers clean!

Meanwhile, the RBI has asked banks to ‘clean up’ their balance sheets.

This could result in increasing the capital burden of banks increasing manifold.

Of the total bad loan stock of Rs 4,43,691 crores in the banking industry, between 65-70 percent is linked to the corporate sector.

During the current fiscal, the finance ministry has pumped Rs 20,000 crores to bail out banks facing a liquidity crunch. It simply implies that taxpayers’ money is used to bail out banks looted by crony capitalists.

Even as all this is happening private sector foreign banks have ‘sold’ their bad debts of small borrowers to private banks in India. Citi Financial sold its debts to Kotak Mahindra that has begun hounding those hurt by the financial downturn. Obviously, none is going to take a close look at how Satyam Computers morphed into Mahindra Satyam! Incidentally, close relatives of Ramalinga Raju of Satyam ill-fame have begun a business venture in Hyderabad. One of its mainstays is a man who had forged the Satyam fraud into the sweet Mahindra Satyam deal!

Operative excerpts from an earlier blog

VV Lakshminarayana, now an ADGP in Maharashtra police, investigated the Satyam computers scandal. He had to wait for several months after being shunted out of the CBI as its Joint Director based in Mumbai. Made  the de facto Police Commissioner of Thane, the neighbourhood sister city of India’s financial capital Mumbai finally – he was ‘kicked upstairs’ to be made Additional Director General of Police – Administration as a real estate scandal was being probed by him.

High profile cases’ always ended in grief for the baddies when Lakshminarayana handled the investigation.

Some examples:

The 2G Spectrum auction can of worms in the great telecom robbery was opened by the tall Lakshminarayana.

The telecom majors’ brazen looting continues.

The press had gone gaga over the results produced by this officer.

Raju and the gang of criminal international accounting firms succeeded in extracting vengeance against Lakshminarayana.

Eventually, its sinister brain – Ramalinga Raju is having the last laugh. has published a dubious list of defaulters.

The Supreme Court has sought details of large value loan defaulters from RBI in a sealed cover. The full list is not yet available. The question being asked is: what is so sacrosanct about the confidentiality given to the ‘rich and powerful’ bank loan defaulters?

Very easily, the CVC can crack its whip and initiate action against the banking industry’s bad boys and gals.

But, with the likes of Bhasin lording over the institution, expecting any meaningful action would indeed be a pipedream.


On Page 18, the Times of India’s Chennai edition dated August 31 2013 has a news item on Bhasin. It says:  

The Central Vigilance Commission (CVC) has sought action against Indian Bank CMD TM Bhasin and former ED V Ramgopal for “high-handedness, arbitrariness and manipulation” of appraisal reports of Malay Mukherjee, a general manager in the bank, with a view to deny him a promotion.

While the finance ministry has not initiated action against the two executives, the CVC has also sought action against Shreya Guha, a director in the ministry, for lapses in conducting enquiry against Bhasin and Ramgopal. For the finance ministry, this the second embarrassment in less than a month as the watchdog was critical of the role performed by the Appointments Board in recommending M O Rego for the post of IDBI Bank deputy MD, the report further says.

Seeking regular departmental action (RDA) against the two top-raking Indian Bank executives, CVC had told the finance ministry that Mukherjee’s performance for 2009 had been reviewed by the then ED A S Bhattacharya and M S Sundarrajan, who was then the CMD of the Chennai-headquartered bank. Bhasin and Ramgopal were not required to appraise Mukherjee for 2009-10 as he had not worked with the two executives, the report adds.


Chakrabarty began his professional career in teaching and research at the Banaras Hindu University where he taught for almost five years before joining Bank of Baroda where he worked for twenty six years reaching the position of General Manager.

He has held these positions in his career:

Chief Executive, United Kingdom operations, Bank of Baroda between 2001 and 2004

Executive Director, Punjab National Bank in 2004

Chairman & Managing Director, Indian Bank between 2005 and 2007

Chairman & Managing Director, Punjab National Bank between 2007 and 2009

Deputy Governor Reserve Bank of India from June 2009


Author: haritsv

42 years' unblemished record of being an investigative journalist. Print quality journalist in 3 languages - English, Tamil, Hindi. Widely travelled, worldwide. Cantankerous and completely honest.

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