Easy to spend borrowed money.

Ever since the present government came in it has been battling Non Performing Assets, or NPAs, which is the jargon for bad loans in banks, left behind by the Congress. Companies were unable to service their loans because of falling growth in the economy, which reduced profits, and because huge loans were dished out to friends of politicians, as a part of crony capitalism. Publicly traded banks have added Rs 1 trillion in bad loans. Aggregate net profits of 39 listed banks have dropped from Rs 168 billion to Rs 3 billion and 24 public sector banks have reported aggregate net loss of Rs 109 billion in the December quarter, compared to last year. A few days back the Supreme Court, in response to a Public Interest Litigation, asked the Reserve Bank to provide a list of every company which has defaulted on loans greater than Rs 5 billion, in a sealed envelope. The Governor of the RBI has said publicly that ostentatious celebration of birthdays is shameful while defaulting on bank loans. In 2013, Pramod Mittal spent 60 million Euros, or Rs 5.05 billion, on his daughter's wedding in Barcelona while his company owed billions of rupees to banks in India. The RBI resists disclosing names of defaulters, maybe because it fears that investors will dump their stocks and, since a lot of these companies have borrowed against their shares, banks will be left with lots of worthless paper. Seems that the Supreme Court is not buying that argument and thinks that banks are owned by the public, in the form of shareholders or depositors, so there should be greater transparency. However, it is not clear how this knowledge will help because the crooks are protected under present laws. Under limited liability laws their own losses are limited to their shares which are worthless anyway and the value of the factory and land owned by the company are a fraction of the amount owed to the bank. While ordinary people have to provide collateral to get loans bankers bend over to provide billions in loans to the wealthy without any personal guarantees. An incensed restaurant owner in Paris has put up a sign saying that dogs will be allowed into his restaurant but bankers will have to pay 70,000 Euros to enter, after having been repeatedly refused loans to open a second branch. Politicians force public sector banks to lend to the agricultural sector as part of vote-bank politics. While total loans to the agricultural sector has risen to Rs 7.5 trillion its share of the GDP has fallen to 13.94%. Bankers do not understand cost effectiveness of projects and then there is outright cheating, known as 'suitcase banking'. There is too much stink. The RBI is trying to contain it.