The news of a scandal involving LIC Housing Finance and some PSU banks is noteworthy. Why? No one is surprised, but what is surprising is that some arrests have been made. An obscure financial services co which suddenly shot in to the limelight with a huge fund raising, has apparently been the go between or the ‘arranger’.
Corruption in public sector is a given thing. Given the salary scales, there is no other reason why someone should work in those organisations (yeah, there are exceptions, you say, but they only go to prove the rule). Corruption in money lending is universal. When one sits at a desk with powers to hand out loans, the temptation is huge. Even private sector is not immune. In the private sector, corruption takes many forms. It could be personal gratification (money, women etc). I know of a private lender, who is innovative. He gives loans to builders in return for giving flats to friends, family, associates and employees at ridiculously low rates. And the lender makes sure that he always sides with a few people and deny loans to competition. So, here, can you point a finger? Especially if the organisation does not have to write off any loans? No one can establish the loss of revenue. That is beyond the realm of audits.
In all cities, there are ‘fixers’ who arrange loans from PSU banks at a price. They could be accounting firms, financial service brokers or just an individual with a suitcase. In fact I cannot imagine a single area of the financial services industry where corruption does not exist. Some fund managers take all kinds of gratification to invest in dubious securities. Or they take it to invest in good companies at high prices. I know of many fund managers whose lifestyle and assets are far beyond what they earn as salaries and bonuses.
The financial services industry (lending, borrowing, broking) is as filthy as it gets. In the seventies, grease was used to get loans from financial institutions. Private sector executives would take money to hand out mandates on investment banking. Some ‘clean’ broking houses would use ingenious routes to generate cash and pay the executives.
Corruption is a way of life in India. Nothing will change it. It has become a part of the blood stream. And believe me- it is higher than ever before. We have a PM who is universally recognised as a clean man. I think his reign has witnessed the highest level of corruption in independent India.
Live with it. Accept it. It is all around you. Right from the moment you pay a bloody tip to an attendant in a five star toilet who holds out his palm to you after giving you a paper towel to your paying capitation fee for a college admission for your kid, you do not escape the web of corruption. You start by paying ‘speed’ money to get a birth certificate and end with your kin paying it for getting your death certificate.