We all are aware of India’s Biggest Financial Scams. Scams are not done by anyone alone. There is always a group of people who support these Scamsters. These people fall into the trap of greed and sell their own nation for it. Scammers find the loophole in the system and misuse it to it’s fullest. My focus is not on Scamsters but on people who support them. In 1992, The “Big Bull” Harshad Mehta scammed Bombay Stock Exchange of ₹24,000 Crores (Inflation adjusted). During 1998 to 2001, Ketan Parekh also known as “Bombay Bull” scammed Stock Market of nearly ₹40,000 crores (Inflation adjusted).
Both, Harshad and Ketan in their times made use of an abysmal and highly corrupt financial system in the country. So, aren’t those corrupt bank officials equally responsible for supporting such unfaithful and treacherous acts towards the country ? Is one alone capable for committing a fraud of such unbelievable figures ? Well, absolutely not. Then, where are those Bank officials and Politicians ?
In 2018, after 26 years of Harshad Mehta Securities Scam the court said that the prosecution has failed to prove the case beyond reasonable doubt. Thus, all the bank officials involved in the case were acquitted. Inefficient judicial system of India led to release of accused bank officials on account of no evidence. A much expected conclusion after 26 years of trial. And it may have happened because of severe political connections with the case.
Ketan Parekh, a trainee of Harshad Mehta himself scammed Indian Stock Market of ₹40,000 crores. Similarly to in Securities Scam of 1992, Mr Parekh was involved in Insider Trading and was believed to have connections in the Bombay Stock Exchange and Calcutta Stock Exchange. He is accused of insider trading, circular trading and bribing bank officials to persuade them to lend shares of a greater extent then was permitted by law. He made a joke of unsystematic and easy to manipulate banking system in the country. As a result, the Calcutta Stock Exchange crashed and investors lost nearly ₹29,000 crores (inflation adjusted). He was barred from trading for 15 years (ended in 2017) and was imprisoned for one year.
Change For Good
There were many reforms in the banking sector after these two stock market scams hit the markets hard. It was expected that Indian Financial System has changed with time and is more secure than ever. But, after all the changes and lessons. One thing never changed “Corruption“.
Scam Again ?
Everything was fine until a Diamantaire Nirav Modi and his uncle Mehul Choksi bribed two junior staff members at Punjab National Bank Branch in Mumbai and used “Letter Of Undertaking” without any collateral to access huge funds. As a result, Punjab National Bank suffered of ₹14,000 crores scam. Nirav and Mehul Choksi made it look so easy. Easier than the earlier scams that took place. Despite, temporarily ceasing passports of both Nirav Modi and Mehul Choksi, the court merely asked them to not leave the country until the case is in trial. And, days after they both fled to London.
Change For Better
Indian Banking System has gone through many changes after the PNB Scam, RBI has imposed many new rules and regulations regarding its control over Nationalized Banks, building advanced software for national Banks to monitor huge transactions, reducing the burden of dual regulation on banks etc. But, after all those changes and lessons. Remember that one thing never changes “Corruption“.