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(Edited Image Courtesy:PIB)
 
“As managing director and CEO since 2009, she has brought India’s largest private bank a global vision and impressive returns, while also reaching out to the nation’s masses with branches in remote villages where banks simply didn’t exist.”
This is how Mr. Anshu Jain, Co-CEO of Deutsche Bank, profiled ICICI Bank CEO Ms. Chanda Kochhar, in the Time  Magazine, which included her in its annual list of the World's 100 most influential people released on 16th April, 2015. 
Mr. Jain's perception has to be taken with a pinch of salt. It should be read along the disclosures contained in three different reports tabled in Parliament, the latest one of which was presented on 27th April 2015. 
The latest one from Public Accounts Committee (PAC) revealed ICICI Bank has paid Rs 54.80-crore penal interest on Rs 164.60 crore that the latter wrongly took from the Government under a farm loan waiver scheme. It was implemented by UPA regime during two-year period ending 30th June 2010.  
In its action taken report (ATR) on ‘Implementation of Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS), 2008, PAC stated: “Rs 164.60 crore has been recovered from ICICI Bank along with penal interest of  Rs 54.80 crore effecting a total recovery of Rs 219.40 crore.”
Surprisingly, the mainstream media virtually chose to overlook this disclosure as it did last year when PAC presented its main report on the subject in February 2014. 
In the main report, PAC had quoted the Government as saying “Rs 164.60 crore had been recovered from ICICI Bank and the RBI had been advised to recover the penal interest due from the Bank.”   
PAC had turned the heat on Finance Ministry’s Department of Financial Services (DFS) and Reserve Bank of India (RBI) for serious irregularities unearthed by Comptroller and Auditor General (CAG) through a test audit of the implementation of ADWDRS. The single largest irregularity related to ICICI walking away with Rs 164.60 crore meant for anguished farmers in connivance with RBI. 
In its report presented to Parliament in March 2013, CAG had stated: “A Private Scheduled Commercial Bank have received reimbursement for loans, amounting to Rs 164.60 crore extended to Micro Finance Institutions (MFIs) in violation of the guidelines.”
In May 2008, RBI had announced guidelines for implementation of ADWDRS that envisaged write-off of loans taken by 3.69 crore small and marginal farmers. The guidelines also provided for partial relief to other farmers. The scheme envisaged total cash outgo of whopping Rs 68,376 crore from the national exchequer. The scheme’s ambit did not cover MFIs. 
As put by CAG report, “Only agricultural loans disbursed directly to farmers were eligible for reimbursement. In November 2010, DFS also clarified to Audit that agricultural loans extended to MFIs by banks were not eligible under the scheme for reimbursement from GoI. During audit in five states (Andhra Pradesh, Chhattisgarh, Odisha, Tamil Nadu and West Bengal), it was noticed that a Private Scheduled Commercial Bank (Bank) have received reimbursement for loans, extended to MFIs.”
CAG dismissed ICICI’s explanation that it had lodged claim under ADWDRS for certain borrowers sourced through MFIs that acted as service providers under the partnership model.
CAG found that disaggregated data of the loan accounts sourced through MFIs was not maintained by the Bank. These loans could not be considered as direct lending to farmers since a lump-sum credit arrangement facility was given to the MFI, against which the MFI actually disbursed the loan to borrowers identified by it. The MFI was also the keeper of all documentation.
CAG stated: “there was no evidence to show a direct relationship between the recipient farmer and the bank, i.e. the individual loan accounts were not on the books of the bank. This was also evidenced by the fact that the debt waiver/ debt relief was credited, not to individual accounts but to the account of the MFI.”
CAG also could not “get any reasonable assurance that benefits of such waiver were extended to the actual beneficiary as copies of the certificates duly acknowledged by the individual beneficiaries, as stipulated in the guidelines, were not available with the Bank.”
There is nothing in the public domain to show that ICICI Bank made public disclosure about the financial impact of CAG-PAC reports on its operations.  It has thus left a question mark on corporate governance and business responsibility norms. 
ICICI is not the only bank that has operational linkages with MFIs for reaching out to poor rural households. Then how is that no other bank filed claims for routing loans through MFIs under the Scheme? 
As for Mr. Jain, being one of the world’s most competent banking professionals, he knows that Indian banks are obligated by RBI to spread their network to unbanked areas under its branch authorization/licensing policy. 
“The current branch authorisation policy mandates that banks have to open at least 25 percent of all branches opened in a year in unbanked rural centres,” says RBI’s Master Circular on Branch Authorization dated 1st July 2014.
It is also baffling to find that public interest litigation (PIL) activists have not lapped up PAC and CAG reports to demand thorough probe into several irregularities in the execution of ADWDRS.
The activists owe an explanation as to how CAG report in this instance is different from CAG reports on 2G scam and Coalgate that were relied upon in successful litigation at the Supreme Court?  
Moreover, the irregularities unearthed by CAG perhaps constitute only a fraction of the farm loan waiver scam as it is based only on test audit and not comprehensive audit of all relevant documents.  
PAC’s latest report has quoted the Finance Ministry as stating that “in 4030 cases of tampering of records, 22 FIRs (first information reports) were filed.”
Was there any FIR against any ICICI official? And why has Rahul Gandhi, who is championing the farmers’ rights, maintained silence on waiver scam? Would any RTI activist facilitate answer to all such questions by seeking all relevant documents on the waiver scam? 
 
 
 
 
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