The cover story ‘Banking Fraud’ in this issue is a unique case in which over Rs 700 crore were given by various banks to a fraudulent company against a security of just Rs 67 crore assets and a corporate guarantee letter from a foreign company which found to be bogus. Also, out of Rs 67 crore, Rs 60 crore worth asset is a property located at Arjun Nagar in New Delhi. But, the banks have not taken any action for the past several years, since the company became defunct, to put it on sale. Due to their inaction, innocent people are buying flats built on this property by the guarantors.
Even the Rs 7 crore worth asset that was seized on the order of Delhi High Court was triggered because of the petitions filed by private lenders. The banks did not play any role on this too. Another alarming fact is related to the role played by State Bank of Bikaner & Jaipur. Way back in 2007, it granted loan of about Rs 6 crore against this asset of Rs 7 crore. It was the sole custodian of this asset as security against loan. But, later it allowed this asset to be shared with the other banks including the private sector banks on pari passu basis.
The lead story is on the price of coal supplies to the private sector power generators vis a vis state owned PSUs. The price for coal charged varies significantly – while the private sector has to secure coal supply through bidding process, the PSUs get the coal free on allotment basis. The coal as fuel for the thermal power plant constitutes about 70 per cent of operational cost and as such its price plays a significant role in determining the power tariff to discoms. Private generators cannot be competitive because of coal cost, whereas PSU generators can offer cheaper tariff. In long run, this discrimination will be difficult to handle and the private players may not investment in the power sector. The government should come out with some solution and ensure level playing field.
