THE HINDU Editorial Vocabulary-January 27, 2017- Topic 1

Banking on good faith

The arrests by the Central Bureau of Investigation of former IDBI officials are worth noting for timing, intent and implications. The agency is investigating these officials, who had been at the helm of the public sector bank’s affairs eight years ago, on charges of facilitating a ₹900-crore loan to the now-defunct Kingfisher Airlines without due diligence. 

Two days after the arrests, a list that included former IDBI Chairman Yogesh Aggarwal, the Securities Exchange Board of India barred Kingfisher promoter Vijay Mallya and senior officials of group firm United Spirits Ltd. from securities dealings, and restrained them from holding directorial positions in listed companies. Mr. Mallya owes banks close to ₹9,000 crore and has been in exile in the U.K. for nearly a year, even as his lenders have scrambled to recover their dues, with little success. Last week, after a three-year-long trial, the Debt Recovery Tribunal allowed a consortium of 17 banks to recover from Mr. Mallya and his companies outstanding dues of ₹6,200-odd crore plus interest related to the airline’s operations. For the Central government, Mr. Mallya’s flight to London has been a source of much embarrassment, with Finance Minister Arun Jaitley terming the bad loans a legacy from the UPA days.

Amidst the rising pile of non-performing assets in government-owned banks, wilful defaulters were said to be responsible for around ₹77,000 crore of bad debts by last July, but the Kingfisher baron has emerged as the poster boy of the problem. Therefore the flurry of action on his bad loans, however belated, could help counter perceptions of a passive approach towards the well-heeled. Breaking the banker-borrower nexus is just as critical for safeguarding public money as is acting against corrupt administrators, but a timely and transparent system is needed to ensure that bankers don’t turn wary of extending credit at the slightest hint of risk. The fear of investigative agencies and adverse audit reports was blamed for the so-called policy paralysis in the UPA’s second term. Prime Minister Narendra Modi had, early in his term, urged officers to take bold decisions without fear of retribution and promised to stand by them for decisions taken in good earnest. That promise requires making some necessary amendments to the Prevention of Corruption Act, particularly the much-too-broad and subjective Section 13(1)(d) that has resulted in many an honest officer being chargesheeted for the corruption of others. If there is malfeasance involved in the IDBI loan, action must be swift and exemplary — but to ensure circulation of credit, systems must also be put in place to reassure bankers against random witch-hunts.

Vocabulary

Intent: resolved or determined to do something.

Example: The administration was intent on achieving greater efficiency

Synonyms: bent on, set on, insistent on, hell-bent on, committed to

Helm: a tiller or wheel and any associated equipment for steering a ship or boat.

Example: She stayed at the helm, alert for tankers

Synonyms: tiller, wheel, steering gear, rudder

Diligence: careful and persistent work or effort.

Example: It's all just going to take diligence and persistence and we've got plenty of that.

Synonyms: conscientiousness, assiduousness, assiduity, application, hard work

Restrain: characterized by reserve or moderation.

Example: He had restrained manners

Synonyms: self-controlled, self-restrained, not given to excesses

Exile: the state of being barred from one's native country, typically for political or punitive reasons.

Example: He knew now that he would die in exile

Synonyms: banishment, expulsion, expatriation, deportation

Consortium: an association, typically of several business companies.

Example: SBI and other banks formed as consortium for bad loans taken by Mallya

Synonyms: association, alliance, coalition, union, league, guild, syndicate, federation

Flurry: a small swirling mass of something, especially snow or leaves, moved by sudden gusts of wind.

Example: A flurry of snow

Synonyms: swirl, whirl, eddy, billow, shower, gust

Slightest: small in degree

Example: A slight increase

Synonyms: small, modest, tiny, minute, inappreciable, negligible, insignificant

Retribution: punishment that is considered to be morally right and fully deserved.

Example: Settlers drove the Navajo out of Arizona in retribution for their raids

Synonyms: punishment, penalty, one's just deserts, revenge, reprisal, requital

Exemplary: serving as a desirable model.

Example: An award for exemplary community service

Synonyms: perfect, ideal, model, faultless, flawless, impeccable