Editorial: Return depositors’ savings
Cooperatives are not in the pink of financial health, again. A high-interest, low-risk business model floated to prospective depositors to draw their hard-earned savings has holes in it as it became clear during the first wave of the cooperatives crisis prominently featuring the Oriental Cooperatives et al.
It will be contextual here to mention Oriental for a number of reasons. First, it was the ‘unsinkable’ Titanic that capsized in the roiling waters of largely unregulated financing in 2013 amidst a housing crisis with deposits worth billions of rupees, belonging, by and large, to members of the general public. Secondly, per rumors mills spinning at that time, that firm had some very powerful leaders of equally powerful parties behind it. The claims that they had their not-so-well-gotten money stashed in that firm’s vaults may not be entirely untrue as none of the accused has bothered to come clean on a serious allegation like this.
Also, as it became evident that the firm was on the verge of collapse, one formidably powerful politician managed to withdraw his fortunes real quick, while thousands of other depositors had no such access. At that time, several other cooperatives went the Oriental way, with hard-earned money belonging to thousands of individuals. This crisis has caused untold miseries to the depositors and their heartbreaking sagas are yet to be written.
The collapse of the cooperatives one after the other points at a serious systemic ill: The lack of a government regulator and the culture of impunity.
Shockingly, a section of the ‘authorities concerned’ washes its hands of these firms. It believes that these firms lie in a gray zone. Their line of argument is that neither the firms fall under the direct jurisdiction of the Central Bank nor that of the Department of Cooperatives.
With friends in high places, it is but natural for them to have scant regard for commoners’ hard-earned savings. This hands-off attitude is also to blame for the cooperative crisis.
What’s more, there’s a tendency to take the firms as a laundromat of sorts, used to turn black money into white. If such is the case, why can’t the government conduct a probe, prosecute the guilty and cleanse the whole damn system? Is it easier said than done or will it boomerang?
Driven perhaps by this mindset, the government has done precious little (or has it?) to rein in these firms even after the sinking of the ‘Titanic’ and other vessels in the choppy waters of unregulated financing with billions of rupees belonging to not-so-powerful depositors.
Even after robbing the depositors of their small fortune, those involved in the multibillion rupee scam are going scot-free, making a mockery of the government. The onus is on the government to end this culture of impunity for this serious white-collar crime and see to it that the depositors get their life’s savings back.
Sept. 29, 2023, 1:36 p.m.
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