All the panacea has failed as the very diagnosis itself was faulty. Insolvency and Bankruptcy Code was their master stroke to fight the chronic ailments in banking sector. Today, when the government is in Parliament for the replacement of Ordinance on Insolvency and Bankruptcy code, the banking sector is discussing about the gutter in which the 'YES' bank has fallen. It is ironic that such a blue-eyed establishment of the finance ministry, which was the fourth biggest private bank in the country, has fallen like a castle of playing cards within no time! This speaks a lot about the reality behind the efficiency tag attached to private sector by the ruling class.

In the Economic Review presented before Parliament, prior to the budget, Chief Economic Adviser (CEA) to the government Dr Krishnamoorthy Subramanian was eulogising private sector. He narrated that when one rupee spent on private sector earns a profit of 9.6 paisa, one rupee spent on public sector would lead to a loss of 23 paisa. It was this economics and philosophy that prompted the government to follow the frantic course of privatisation. They were eager to privatise everything including the profit-making PSUs. Insurance and defence sectors are also not spared. Tall claims of five trillion dollar development achieved through investment-driven economy were propagated. The womb of Indian economy was gleefully opened before foreign capital by the government that always chants swadeshi mantra. 'YES' bank was yet another fortunate beneficiary, which could flourish to new heights in a small period. Their transactions were mainly with the corporate world. They were providing loans to investors of dubious character.

The scanners of RBI or government did not come on their way. ‘YES’ bank also was celebrated as a glorious model of private sector growth trajectory. Both during the UPA and NDA regimes they became sponsors or partners in government-initiated programmes and projects. Investors deposits were spent on all sorts of engagements violating banking regulations. This unriddled voyage of YES bank went unchecked till it got crashed. The government and the finance minister in their typical style approached this major crisis in an unimaginably lighter vain. But the crisis of YES bank is not that light as they pretend it to be. It is deep and serious. That draws the nation's attention to the systemic crisis that has engulfed Indian banking industry.

As part of the crisis management the government has drawn SBI to save the YES bank and 49 percentage of their shares having a face value of Rs 2 each was entrusted with SBI at the rate of Rs 10. SBI, the PSB, was roped in by the government to bear the brunt of mismanagement and malpractices which were the hallmark of YES bank. It happened earlier also in the banking sector. The looters of public money will make the profit and when they fall in crisis the losses have to be shouldered by the public sector! This is the undeclared law prevailing in the realm of investment driven market economy.

The much-acclaimed efficiency of private sector has been proven to be hollow a claim on many instances all over the world. When the celebrated banks of America like Lehman Brothers and Meryl Lynch fell into severe crisis, they were saved by pumping in crores of dollars from the public exchequer. In global capitalism this has become a practice. The BJP government in India is religiously following the suite by imitating the same practice. They invented that insolvency and bankruptcy code is the best way to put it into life. Non-Performing Assets (NPAs) have become the usual term in financial sector.

Even though it is a liability the government prefers to call it 'asset', as the defaulters are their political and economic cousins. According to the RBI documents the aggregate amount of gross NPA of PSBs and scheduled commercial banks as on March 31, 2019 was Rs 8,06,412 crore and Rs 9,49,279 respectively. Those who are responsible for these alarming figures are wilful defaulters. The government is unwilling even to publish their names due to reasons known to them.

The hidden agenda behind insolvency and bankruptcy code is to protect them in a tactful manner. Instead of recovering bad loans the government's attempt is to resolve them and this code is the resolution module for it. A quick look at the resolution package would expose the bankruptcy of this code itself. In resolving the bad loans of Bhushan steels the bank's lost 21000 crores. The outstanding loan of Bhushan steel referred to national company law tribunal was Rs 6,000 crores. The NPA resolution code helped TATA's to own the company at the cost of Rs 35,200 crores. TATA's gain! Banks lost! Government reclaims, one NPA is resolved!

In the present scenario of privatization and free market frenzy the advocates of market fundamentalism may laugh at it. But the time has come to seriously think about bank nationalization again. Even at this crisis ridden times, when private banks one after another are becoming bankrupt, the nationalized banks could overcome the odds. In 1969 it was a political decision that led to nationalization of banks. Now the government and the policy makers are bent to crucify them, only because they belong to public sector. Still with an instinct of survival they serve the nation and the people. That is why when the YES bank fell in troubled waters, we have an SBI to lend a helping hand. This is the greatness of public sector in practical terms. Hence stop glorifying private sector. Go back to bank nationalisation. This is the time for the country and the people to raise this slogan.
(IPA Service)