OPERATION KUBERA- BANKS RESPONSIBLE FOR BLADE MAFIA?

This has reference to the "Operation Kubera Phase 2" launched by the Police department of Kerala to weed out the "Blade" mafia and the statements of Home Minister related to it.

First of all, the Blade Mafia exists only because there are takers for it. The people who take the loan from these gangsters very well know the high rate charged by them and other inherent dangers in it, still put their neck out to take these loans and finally complain about harassment. To avoid this, the Home Minister says banks should be more liberal in giving loans to the public to ensure that they do not go to the money lenders. The point is well taken. But the Banks function under some laid down norms regarding their functioning. They cannot lend money to anybody and for any purpose as they wish. The paramount point to be considered by them is the repayment capacity of the prospective borrower and the purpose of the loan. If the person has capacity and willingness to repay the loan taken, I am sure they will not default with the loan sharks also leading to harassment. More important is the purpose for the loans. Most of the time these loans are taken by these people for consumption purposes like buying consumer goods, conducting marriages etc. beyond their capacity and without any steady source of income. Both these are not acceptable in the Banking activity as the Banks are dealing with money mobilised from the Public.

I am sure the Banks in Kerala generally do not decline any loans applied for falling within the guidelines fixed and hence the blame on the Banks is misplaced one.

Similarly the Chief Minister also asked the Banks in the meeting of SLBC to consider giving soft loans to the repatriated NRIs for their rehabilitation. He also reminds the Banks that NRIs had helped the Banks in mobilising deposits and hence it is the duty of the Banks to help them in need. As a retired Banker, I would like to mention that while depositing their money into the Banks, they used to bargain very heavily to get the maximum interest and used to switch the deposit to others even for a slight difference, which implies that they were doing a commercial transaction and not favouring any bank while depositing the money. So they can expect similar considerations only from the Banks while asking for loans.

It has become a fashion with our ministers and politicians to blame the Banks on the loan front to gain some popularity without either trying to understand the facts or conveniently closing their eyes on the facts. I would urge them to desist from this dangerous practice of pitching the customers against the Banks for cheap publicity. 

I also wonder why no organisation of Bank Officers have come out against this practice of blaming the Banks and its officers for all ills in the financial sector.