Axis Bank is in the news for all the wrong reasons. Since Demonetization, Axis Bank is a fixture in the news for IT Raids, fake accounts, black money and unaccounted gold.
If one recalls the origin of Axis Bank, the Axis Bank expose of scams post demonetization don’t seem surprising! Axis Bank has Scams in its genes. In 2007, Name of the infamous UTI Bank was changed to Axis Bank. They warned the customers back then through their slogan. “UTI Bank is now Axis Bank. Everything is the same except the name!” Carrying forward its legacy of scams post Demonetization, Axis Bank has stood with their slogan.
Digging the history of Axis Bank through its roots in UTI bank, one will explore numerous scams that have looted India over the years.
UTI Scam of 1996-97 is unforgettable for those two Crore Middle class people who lost their hard-earned savings. The US-64 scheme of the Unit Trust of India had two Crore investors who were mainly small savers like retired persons, widows and pensioners. These small savers were made to believe that the mutual Funds were financial institutions that invested people’s money in various schemes, giving a ‘gauranteed’ return to the investor. Due to the expected results as high as 18%, the US-64 scheme became the most popular in 1993 and 94. The Unit Trust of India was the largest mutual fund in the country created in 1964 through an act of parliaments. The UTI (of which the US-64 scheme was the largest) was set-up specifically to channel small savings of citizens into investments giving relatively large returns/interest.
Under PV Narasimha Rao Govt of Congress Rule in 1992, Economy witnessed a major liberalization. It immediately led to the liberalisation of the UTI, throwing it to the mercy of the stock market. In 1992, itself the US-64 scheme was changed from a debt-based fund to one linked to equity. In 1997 Congress Finance Minister Chidambaram removed all Government Nominees from the board of UTI in the process of Liberalization. As it is, the US-64 didn’t come under SEBI regulations. The investors couldn’t know where their funds were being invested. Chairman had the arbitrary power to invest upto Rs 40 Crore. All these factors of ‘liberalisation’ laid a foundation for numerous Frauds. No wonder, within one year of Chidambram’s liberalisation, in 1998, the UTI crashed, and the new BJP-led government organised a large Rs. 3,500 crore bail-out to prevent default.
During this Crisis, Jayalalita pushed the new Chairman P.S. Subramanya as a political fixing with the Central government. Under his Chairmanship, Small Investors’ money was liberally used to promote business Houses, favors to Politicians and invest huge amounts in junk bonds. He got a big fat commission on all the dealings. He also had a major role in Ketan Parekh Scam of 2001.
Within no time, UTI reached a state of collapse. P S Subramanyam then played a dirty trick on Indian Middle class people by huge marketing of UTI through advertising companies to attract investments from them. At the same time he leaked the information to the few Big Corporate Investors to withdraw their funds.
This scam destroyed the peace of mind of lakhs of retired pensioners and middle class small savers. Their trust that US -64 was the safest possible investment was broken. Those unfortunate retired persons who had invested a large part of his/her PF, gratuity etc in the US-64 scheme couldn’t recover from this blow. Not only had the person’s income (interest/dividend) halved overnight, he/she also lost a large part of the investment. So, a person who invested Rs. 1 lakh could recover Rs 70,000 only.
Carrying forward the legacy of UTI, Axis Bank has been caught in numerous scams in Demonetization implementation. Well, we were warned in advance through their Slogan.
“UTI Bank is now Axis Bank. Everything is the same except the name!”
Jyothi Suparna Chincholi