THE TALE OF AN 8-YEAR OLD ORPHAN

By Ruma Dubey

Once upon a time….there is actually no “once upon a time” here; this is a story of today, now.

Sudhir is an eight year old orphan, living with some of his relatives in a small village in Begusarai, Bihar. Last week, while India was getting ready to celebrate its 70 Independence day, he was extremely worried. He had to raise Rs.5000 as first instalment payment to State Bank of India. His mother, in 2006, long before he was even born, had taken a loan of Rs.21,000 to start a small household business as her husband was not earning.

In 2012, she passed away and soon SBI sent a notice, demanding their money back. The surviving father raw away, abandoning his child. Relatives took him under their shelter and soon, another notice came and this time on his name. The little boy rushed to the village elders, worried, eyes brimming with tears, not knowing what to do. He was scared he was going to jail. The elders pooled in the money and managed to raise Rs.5000.

Last week, Sudhir went to the court and when his name was called, the judge saw a small frail looking buy, clothed in tatters, walking into the court towards him, with a cheque clutched in his hand. The Judge was shocked and demanded what was going on; why a child was being made to go through this? When the judge was told about the little boy’s financial crisis and personal tragedies, the Judge was moved. He asked the SBI officials to come to the court immediately and passed a judgement, waiving off his loan after accepting Rs.5000. He asked SBI to give the boy a receipt paid, knowing fully well what could happen later.

This story, very real and as recent as last week had a happy ending. But all such stories, of debt of less than even Rs.50,000 have tragic endings. We have read stories of people, almost always those from the economically challenged class, being imprisoned because they did not repay a few hundred rupees of the bank.

If someone, not knowing India would read this, they might misunderstand that India is so fair, it looks at all with the same eye when it comes to rules. But we all know India too well! Fair? Banking is probably the most unfair sector of all, where we see the power of money at its worst.

Right on the eve of Independence Day, RBI has sought clarification from a consortium of 21 banks, led by UCO Bank about why they extended a whopping Rs.5262 crore loan to Kolkatta based rice trading company, REI Agro despite it being involved in fraudulent practices.

So on one hand, we have this poor little boy quivering with fear, unable to raise Rs.5000 and on the other, promoters like that of REI Agro who rob the banks with gumption, with no remorse. The boy is poor so it is easy for the banks to batter him down; why not the same treatment being metted to the rich and powerful?

Yes, the corporate sector is responsible for a major part of the rising bad loans causing inconveniences to the honest borrowers. So why do we have these hypocrisy in banking? While a small individual, for a smaller loan, is punished hard and long, the bigger fraudsters, are not only allowed to default, but they are granted more loans despite a pathetic credit history. Forget arresting, their personal properties are not ever attached. And these corporate honchos have today burdened the entire banking system and made healthy banks into debt holes. Aren’t they economic terrorists’?

Bad loans cannot be blamed entirely on high interest rates and lower economic growth. Banks are to be blamed because when it comes to big companies, they have no verification process of end use of the funds, poor assessment and a meaningless recovery process. Banks, as per the rule book, can get a representation on the Board of the borrower firm but how many banks have actually exercised that rule?

Somehow, as we celebrate this 70^th year of Independence, we cannot help but wonder what exactly are we celebrating; are we really free?