Who pocketed 'Poojary' loans?

Blame politicians for everything that went wrong with the public sector banks in India. So we have been told – by the bankers first. That constant refrain we all echoed dutifully. Because bankers alone are in the know of things in banks. 

No one holds any brief for political parties and their shepherds. To be sure they are not angelic. At the same time it is difficult to accept the view that they are more ebony black than others, especially the bankers. Politicians were there behind a few loans. They were not there everywhere. For the bankers to gripe. And the banking industry to derail. 

For the bankers have several tricks up their sleeves to hoodwink even the wiliest politicians. The willing manager smiling and ever at the service of the honcho seated before him “forwards the sponsored application”. Then will follow from the regional or zonal offices a steady stream of queries. If it is from the top or the middle levels, the process is in the reverse. And the manager is bad mouthed. Exhausted the “collector” retreats. Everything will be over before you say touchwood if vested interests are there inside. 

It is this made-easy system that works wonderfully. The so called RBI norms are replayed as “Gita”. Right. If there is a check list of 20 items no application would cross the fourth point. That comes to the rescue of unwilling bankers. If the RBI norms are also satisfied there yet is a scud missile with nothing can ward off. For somewhere a hidden clause that no loan should be granted if the perceived beneficiaries’ have even a distant relation who is a defaulter ten years ago in a similar bank 1500 km away. 

Defined, the loose compound noun “distant relation” can be stretched to mean the clients grandfathers, uncles, father-in-laws, first cousins and great grandsons. Such enquiries coming precise and sharp could unhorse even the staunchest.

Tough conditions indeed with no one can circumvent. The customer would be hounded out if he dared to murmur examples of the golden rule breached by the same bank. The thumb rule is that a kick-back of ten per cent catalyses the sanction. If the amount is small there is no hope. Collections are also made in the name of higher ups. Now and then crumbs are also thrown at the subordinates to keep them in good humour.

All said and done credit is a delicate affair. More of a judgment than a product of readymade formula even if an apex bank hands it down. That is why it is called commercial credit. With implied risk. And it is for the bankers to say yes or no. Their right cannot be questioned. 
That well is for the bankers spelt with a capital B. Unfortunately their tribe is decreasing fast in the Indian banking industry – private banks included. So the radiation from politics helps them. The flood of apocryphal stories of political intervention is a smoke screen created to hide day light robberies. The celebrated “Poojari Loans” belong to that category. 

How those controversial loans were named after Mr.Janardhana Poojary, a minister of state in one of the Congress ministries? The idea of distributing the loans in small lots was taken by a set of well meaning bureaucrats in the early eighties. Good reasons for that. By then the nationalised banks were close to the end of their branch expansion plans. The per bank population target was within sight. They felt the need for a mass awareness of the banks’ roll and potential. How to do it? Media campaign and advertisements would not have the necessary reach. More mileage they thought would come if the cheques were handed out to the beneficiary in a festival mood. ‘Melas’ complete with razzmatazz and drum beat were so planned. So far so good. At this point bankers entered and hijacked the scheme. 

Remember the amount earmarked for such loans? Just a few hundred crores. At the end of it all the intended targets would not have received even a tenth of it. The rest went to line the pocket of bankers. The bankers carried conviction saying the local chieftains played the mischief. As a matter of fact the political light-weights were there only as agents and front men of bankers. 

The ‘melas’ were meticulously planned. Masterminded by the key personnel descending on the designated branches from the regional and zonal offices. The local lilliputians were kept at arms length. On the plea that the working of the local branches were not to be disturbed. Public announcement would claim as many as 200 or 300 checks would be dispersed. In full view of cameras. The VIP in effect could be seen doing the ritual and he leaves. The rest is history. And Poojary became a laughing stock. 

Thus the scheme conceived in good faith was ridiculed and distorted. The media, let us admit it, also played a negative role. If the entire amount was spent on conventional media advertisement none would have raised any objection. And it would all even have passed unnoticed. 

A senior banker tries to put the record straight. “The small loan scheme had several good features. It took the message of banking to farmer’s doorstep. The entire amount spent was only a fraction of what was being spent in the name of industrial promotion. And its multiplier effect was 100 fold more. 

Almost everywhere it was a show of by and for bankers. In the remote areas of Bihar, Orissa and Rajasthan not even a rupee was given out. Elsewhere mostly eyewash. Less hanky-panky in West Bengal where the banker sporting pin-up ties and designer shirts ran the risk of being beaten to pulp by the inspired party cadres.

Thus the bankers got away leaving Poojary and a few political dollops covered in mud. Those who made a pile are now reigning monarchs in various public sector banks – as GMs, Eds and even CMDs. As for the innocuous small loan scheme it remains an example of unhealthy banking practices. 

To get back to the role of political parties and their leaders in the banking industry. It is not denied that they tried to gate crash for the sake of “collecting 2-3” as the phrase goes. Often they are invited in by bankers themselves to get their promotions and transfers. At the higher rungs it is big money in more sophisticated ways. It is so even now. 

Clean image
It is not for the media to issue character certificate. Let alone brand X as honest and Y otherwise. But it is certainly up to them to dust out the cobwebs of misunderstandings and disinformation. 

Mr.Janardhana Poojary was the minister of state of finance in the early eighties. He championed the cause of the small loan scheme. And he was its esoteric interpreter and evangelical exponent. The media named the scheme after him with all the spotlight of adverse publicity. 

True, Poojary’s ill concealed zeal got the better of him. His unorthodox ways were displeasing to those who held dear the dictionary meaning of the word discipline. So his antics became fodder for headlines. 

However, senior bankers who knew Poojary closely had a different tale to tell. They were taken in by his simplicity, no-frills life style and devotion to work. As a rule he shunned five star comforts, eating frugal meals and practically made no demands such as visit to tourist spots and temples. 

As an MP he often visited banks as member of parliamentary delegations. But consistently declined expensive gifts and sight-seeing trips organised by the bank officials. In one incident in Chennai, the bank concerned was happy that the former minister had turned down his gift parcel. For that came handy for the bank to please a RBI executive who had popped in without notice. 

That episode is incomplete without its sad denouement. An AGM who was in charge of the gift parcel came to grief being unable to cover the gift trail. It was his misfortune that the CMD who gave oral orders through the zonal manager departed from the scene before the papers started moving. Ditched also by the zonal manager, a GM, the AGM was suspended pending enquiry.
Coming back to Poojary he was perhaps the only visiting MP who made no purchases while in Singapore as a member of delegation. His visits to the bank branches were punctual to the minute and matter of fact. He only asked the right questions. No vehicles were sought for private visits. Perhaps he was one and the only one of this type.

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