PNB scam exposes Modi's claim of graft-free administration: CPM

The CPM has said the NDA government's claim of a corruption-free regime now lies in tatters with the unearthing of the "most brazen and shocking case of defrauding" of Punjab National Bank (PNB) soon after the "murky" Rafale fighter deal.

In an editorial in its mouthpiece 'Peoples Democracy', the CPI(M) said the fraud allegedly committed by diamontaire Nirav Modi has been going on since 2011 and peaked in 2017 and it indicated the "scale and ease with which such fraud" was perpetrated.

"Does this what 'ease of doing business' amounts to (Prime Minister Narendra) Modi's New India?" it asked.

"The Modi government's claim of a corruption-free regime is now in tatters with the Nirav Modi scandal coming soon after the murky Rafale fighter deal. Both Nirav Modi and (his uncle) Mehul Choksi are known to be close to certain BJP leaders; in the latter case, another big businessman Anil Ambani is the beneficiary. Crony capitalism and the nexus with corrupt politicians is at the root of the non-performing assets and the banking crisis in the country," it claimed.

The party also found no reason in some quarters calling for privatisation of banks, saying those rooting for privatisation should look at the track record of private commercial banks.

"Since independence till 1969, 559 private commercial banks collapsed, leaving the depositors high and dry. Post nationalisation, 25 private banks that failed were rescued through a merger with PSBs, including the so-called "new generation private bank", the Global Trust Bank," it said.

The CPM said has wider ramifications as four other banks – SBI, Union Bank, Allahabad Bank and Axis Bank – also have exposure.

It said banks have undertaken risky investments and have been tempted by the prospect of easy earnings from interest differentials, commission fees and fees for services. "There has been a considerable dilution of due diligence, and weakening of monitoring and supervisory systems," it said.