On why it is important to get the bank to furnish accounts

This illustration has been an exhibit in the DRT and DRAT hearings and has been part of the letter to the Governor Reserve Bank of India, copied to the Finance Minister and has been convenient not to take note of.

Over $ 1.5 million by way of inward proceeds, direct from the Bank of Montreal, which is my overseas customer's bank, flew into my account during 1997-2001. The branch received it as a transaction in an account called FUBP account for which there was no passbook, from there internally moved a large portion of the amount received to an account called PCL account (towards repayment), debited interest, debited bank charges, paid out insurance (on which it did not make a timely claim) which was redundant, created a deposit in the name of the company's directors as additional security, and if there was any balance remaining of a typical transaction of about $50000 after all this, lets say, if INR 75000 remained after all that, that 75000 was transferred to the Current Account which simply showed the day's proceeds as an inward reciept of INR 75000. Period. It didn't say that the total inward remittance was $50000 exchanged for INR 20,00,000, didn't say INR 15 or 1700000 out of this receipt was transferred instantly towards PCL repayment, didn't say INR 50000 transferred to PCL interest, didn't say INR 50000 transferred to FUBP interest, didn't say what deposits were created, didn't say what was paid out towards redundant insurance, didn't say what was taken as bank charges. There were over 50 such transactions and the total inward so grossly unexplained totalled in excess of US $ 1.5 million. Within the bank where did the money go?

A more important reason. The Erode branch of Federal Bank has had two consecutive branch managements during that period that came under investigation for compromising on customer accounts, to say the very least.

And the bank went to court with none of the particulars related to the $1.5 million dollar that it internally adjusted towards repayment and interest, but with an arbitrary two column narration for an arbitrary period of 9 months, without bothering to fill in the second column right as illustrated in the post after next.

Is this permissible by interntional banking standards?

..

On the helpless situation

The Banking problem is coming to an end, but in the end is a forced solution. The bank managed to do everything at the DRT to have the IA for accounts - something which is a matter of very basic right - dismissed. There had been some dificulty continuing with the legal appeal process. The bank took advantage and moved to attach the property under a draconian legal provision known as Surfasi Act..This forces us into a negotiated settlement - ON THE BANK'S TERMS.. Discussions on the sale of property is on, but now it is seen as a distress sale... A completely helpless situation

The bank is rushing to take over the property pledged, which is [more] valuable [than the amount claimed by the bank]... What we are trying to do is to sell another property worth much more, but due to the perceived distress the value is not optimally realizable... On the other hand the bank, due to the fact that they could [handle] legal proceedings, acts with the upper hand, forcing us to offer an undue amount, unsubstantiated..

I wrote an article at Instablogs which is a sort of a journalistic blog portel. This created interest, but this is not enough from the media.

The legal framework is so much pro-bank..One is DRT - a court were banking disputes are heard... DRT is originally set up by a consortium of banks and the banks ( technically one of the disputing parties ) control the DRT.On top of that the Surfasi Act allows banks to take over any property pledged WITHOUT DUE AND PROPER LEGAL RECOURSE

I have been asking the bank how they arrived at the liability in the first place.

The real problem is that there is a lot of background harm happening that interferes with all my prospects. Venture capital funding for my new venture, and even spills over to my public activities by the adversity of all background records that have gone on record based on the superficial reports of a "suit-filed case" in banking.

The imbalance of the situation is that for me as an individual there has been so much at stake, while for the bank as a faceless corporation with the accountability for all this harm NOT attributable to any single employee, has been sitting tight completely refusing to acknowledge its role. so I wanted to fight in spite of every hardship that I had to go through

What is happening now that there is a forced situation. There is a threat of disgrace to the family, and against this threat whatever is done now is done in a manner that that an undue amount is paid out as a settlement and this money is raised by foregoing assets in a suboptimal manner. Together this has compounded the losses.

Something so basic, drags on....

The bank moved DRT which was slipshod in description and unsubstantiated in claim. It contains no details of how the liability was arrived at.

I used this illustration to brief the Advocates on how basic this is and have used the same illustration in the letter sent to the Governor, RBI.




The petition filed at the DRT for a comprehensive statement of accounts has been very very slowly progressing with the Presiding Officer not posted in DRT Coimbatore during a 2 year period, petition dismissed once without our knowledge, dismissed again after a year, taken to DRAT, won the appeal with a directive to readmit the petition at Coimbatore and when filed again, all cases at DRT Coimbatore were moved to DRT Madurai. As on April 9, 2007 the DRAT's some what favorable order has not been taken up by the DRT, because of the delays in the jurisdictional realignments within DRT.

It is more elaborately narrated in my email to the Advocate.

This has taken 5 years .... Just the process of petitioning (unsuccessuly) for a statement of accounts to show how the liability was arrived at.

Now [june 2008] I hear from my Advocate that it came up for hearing on May 2, and an order was passed on May 9 by the Presiding Officer to dismiss the petition.


..

Letter sent to the Governor, RBI, now open

In follow up of the instablog article “An Entrepreneur, a faceless and unseen Ogre, an incredibly reluctant authority and non existent justice” published on April 1, 2008, (which appears taken down), the letter to the RBI Governor is now published on ScribD

Hope this reaches the Governor, RBI, if it still hasn’t.

The letter is embedded below, if the document is not visible, or takes time to load, please read it from https://www.scribd.com/fullscreen/3246680?access_key=key-18iig6a6sip1qa0rb8wo

letter to the Governor, Reserve Bank of India by Sivasubramanian Muthusamy on Scribd

This issue on Instablogs.

...

A summary of this problem is posted at Instablogs