As news of  peanut penalty of Rs 49.50 crores on 22 Banks flashed on my TV screen, I felt disgusted as this expose has also ended like our other scams involving politicians.     It is one more sordid scam, which has been encouraged by CMDs / EDs of all these banks under the very nose of RBI.   Scam was exposed by not the regulator but by an online portal.    Immediately, suspension  of some  junior officers took place.   Soon internal enquiries of such banks mostly gave clean chit to themselves.    Most of the suspended officers were re-instated as deeper enquiries would have revealed the name s of top bosses.  When cornered by overwhelming evidence on camera, regulator imposes peanut penalties.    Who will bear the cost of such penalties.  It is the poor public i.e. shareholders of these banks, as payment of such penalties will reduce profits and / or dividends.    It is not going out of pockets of any CMD or Board Directors.  In any other part of the world, strict action would have been taken against top brass too and Bank Boards would have been made accountable for such lapses.  Basel too has such provisions for holding Board responsible for risk management.  This episode has already dented the reputation of these banks.  Can RBI spell who should be accountable if there is increased risk of reputation due to acts and omissions of bank officers at such a large scale?

The scale and magnitude of flouting of norms is now well established as 22 banks across India have been fined by RBI.   Can such a large scale violation of RBI norms can take place without the active connivance of top brass i.e. CMDs and EDs.    In an industry where we have hardly any whistle blowers, it is impossible to think that such large scale violation can occur without the active connivance of top brass.    A feedback from junior officers will clearly give an idea as to how they are treated in Review Meetings for missing the targets.   The Managers, Sr Managers and Chief Managers are bullied and made fun if he talks about RBI norms.  Violators of such norms tell their success stories in such Review Meetings without any shame.   Top brass encourages them and scolds the honest bankers.  At the time of promotions, such violators get priority as they are considered as the people who will take the bank forward.    Will any Indian media show some courage to take up this issue to the logical end  i.e. action against the real culprits who have been encouraging, junior officers to flout the KYC norms for meeting targets, earning higher commissions for them from sale of insurance policies  or  earn some foreign trips by mis-selling of third party products.

The news item which I read online ended with following words  RBI said that "any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies".   This is a typical Indian style of any investigation i.e. shift the blame on some other agencies – this type RBI has merely passed the baton to tax and enforcement agencies. 

Great end to Great Episode!  I think I was wrong in expecting some fruitful action, inspite of the fact that one of the outspoken DG of RBI had given clean chit to private banks even before investigation has started in one of the Cobrapost expose.