A few years ago, my daughter got into three of the top 10 universities in the US. Like any parent, I was proud of her. We didn’t have a minute to waste, so we got down to the logistics and started looking at our financials in order to support her dreams.
We started with the admission process to the university. One of the universities asked her to deposit over Rs 60,00,000 as tuition fees and other expenditure, while another charged a little over Rs 50,00,000. It was obvious that we were in dire need of a loan.
The recession had just started in the US and the job market was on a downturn. None of us were sure whether my daughter would get a job that would pay her enough to repay the loan with ease. The third university fortunately, offered a 50 percent scholarship, but even that amount was beyond our paying capacity.
However, I did not worry about it at all. I had seen crafty advertisements by banks luring students to apply for loans. I expected any bank to easily grant my daughter a loan to study in such a reputed university.
My daughter shortlisted a few banks, got her documents in order and started applying for loans. But if only it were that simple. At every bank, the officers either ignored her or behaved insolently with her. She approached one bank after other, running from desk to desk. After some humiliating retreats, she was on the verge of giving up.
Meanwhile, I was trying to help get her a loan. I approached a few bank officials through recommendations. The funny thing was, none of them said no, but the responses weren’t too encouraging either.
One of the banks was ready to offer the loan, but on the condition that I deposit an equivalent amount with them. Only then would they provide a guarantee letter to the university. To me, it seemed like it was an open offer to convert black money into something more legal. I did not have time to go into details to douse my curiosity. With other things on my mind, I never found out whether the official in question was a middleman or a bank employee.
Finally, I approached a very senior officer of a bank. He directed me to a branch. However, the branch manager was unwilling to offer me a loan as he did not find my salary adequate enough to repay the loan.
He asked me to mortgage some property that I had in my name. I offered my flat in a society, but since the registration was incomplete, he ruled out the possibility. Fortunately, I also had a small piece of land in my name. When he estimated the value, he found it to be too small for the loan value. He let out a sigh of relief when I expressed my inability to offer anything else.
When my luck ran out in Kolkata and Delhi, I made a last ditch attempt in Dehradun. My relatives and friends introduced me to a bank. This bank did not trust me despite my government job and paying capacity.
However, after much back and forth, they obliged. I had to mortgage my land with the bank. And in addition, I had to arrange for two guarantors whom the bank thought rich enough to pay in the event that I failed.
This was the period when Vijay Mallya, Nirav Modi and various other businessmen had begun to procure billions of rupees as loans from different banks. They were granted loans on the basis of Letters of Understanding, without any assessment of their repaying capacity. They were granted new loans despite not having paid off their previous ones. And finally, it became one of the many scams that is plaguing our current system.
Political parties float the idea of loan waving during elections. Some winning parties declare the commitment too. The poor farmers run from pillar to post; Some even commit suicide. But the likes of Vijay Mallya and Nirav Modi simply slip out of the country and then challenge the government in a ‘catch me if you can’ situation.
The fraudulent withdrawal of money is not a new phenomenon. Such swindling has been going on for decades. Demonetisation was introduced to monitor cash transactions and turn India into a less cash society. But how has this issue been addressed? In these cases, the money had flowed through official documents. It is not difficult to find the names of those who are involved. The government also had some bank employees arrested. But no one caught hold of the individuals who issued the LoUs, or ascertained the grounds as to which these LoUs were issued. These cases will be closed after some time and these scams will end up as something that is brought up during tea-time discussions.
Sometimes, I smile when I spot advertisements for education loan for meritorious students; or when political parties try to outsmart one another by promising loan waivers for farmers. I ponder upon whether these loans are truly meant for needy people or for greedy businessmen.
(NC Bahuguna is a retired Indian Forest Service officer. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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