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Aadhaar: Is the biometric data of human body immortal and ageless? Part 15

Both Aadhaar and NPR are based on the unscientific and questionable assumption that there are parts of human body likes fingerprint, iris, voice etc that does not age, wither and decay with the passage of time. Those who support Aadhaar and NPR seem to display unscientific temper by implication

The reason for the vehement opposition to 12-digit biometric unique identification (UID)/Aadhaar number project is that it is contrary to the basic structure of the Constitution of India, which provides for a limited government and not an unlimited government. The project is aimed at creating an unlimited government. Even if a law is passed to make it legal it will remain bad and illegitimate. This is the argument that has been advanced by the lawyer representing the opponents of the project in the Supreme Court. The matter is likely to be heard again on 10th December.
 

For a 21 month period between 25 June 1975 to 21 March 1977, the country was put under internal Emergency under Article 352 of the Constitution of India, effectively bestowing on Indira Gandhi, the then Prime Minister, the power to rule by decree, suspending elections and civil liberties. This was made legal and it remained so as long as it lasted. The powers given to her virtually had no limits. The human body came under assault as a result of forced vasectomy of thousands of men under the infamous family planning initiative of Sanjay Gandhi.
 

Like Indira Gandhi, Dr Manmohan Singh has been a Prime Minister for nearly 10 years. The installation of authoritarian architecture through biometric identification of Indians is likely to get the similar response from voters as they had given in the aftermath of proclamation of emergency. The human body is again under attack through indiscriminate biometric profiling, with patronage from Rahul Gandhi. Indian National Congress (INC) is likely to face a bigger defeat than it had suffered in 1977. Uttar Pradesh elections and the recent assembly elections are indicative of the trend. 
 

Given the fact that judicial orders from the High Courts and Supreme Court have so far dealt with the limited issue of how UID/Aadhaar cannot be made mandatory, first thing anyone should do understand with regard to gathering momentum against biometric unique identification (UID)/Aadhaar number is that the very first document that residents of India encounter in this regard is ‘Aadhaar Enrolment Form’. At the very outset the enrolment form makes a declaration is that “Aadhaar Enrolment is free and voluntary.” This is a declaration of Government of India. This is a promise of Planning Commission of India headed by the Prime Minister. As a consequence, all the agencies state governments, the Government of India and the “agencies engaged in delivery of welfare services” are under legal and moral obligation to ensure that the UID/Aadhaar cannot be made mandatory. As such the Supreme Court has simply stated what the Prime Minister himself has promised. In its interim order what the Court has done is to simply reiterate the significance of the promise made by Government of India. If programs, projects and schemes are launched in breach of Prime Minister’s promise, it will set a very bad and unhealthy precedent and no one ever in future trust the promise made by any Prime Minister.  The column number 8 in the Aadhaar Enrolment Form on the first page refers to “agencies engaged in delivery of welfare services” but does not define who these agencies are. It appears that its definition has deliberately been kept vague. Which are the agencies that are involved in delivery of welfare services? Aren’t security agencies and commercial agencies with ulterior motives included in it?  
 

On page number 2 of the Aadhaar Enrolment Form provides, “Instructions to follow while filling up the enrolment form” which states that column numbered 8 is about seeking consent from an Indian “Resident (who) may specifically express willingness / unwillingness by selecting the relevant box” by ticking “yes” or “no” options. The column number 8 reads: “I have no objection to the UIDAI sharing information provided by me to the UIDAI with agencies engaged in delivery of welfare services.” Now, the issue is that if residents are promised that enrolment is “voluntary” they may give their consent unaware of its ramifications but if they know that it is made “mandatory” they may refuse to give their consent.
 

Are the agencies with whom Planning Commission’s Unique Identification Authority of India (UIDAI) on behalf of President of India has signed contract agreements with foreign surveillance technology companies like Accenture Services Pvt Ltd, US, Ernst & Young, US, L1 Identity Solutions Operating Company, now France (as part of Safran group), Satyam Computer Services Ltd (Mahindra Satyam), as part of a “Morpho led consortium” (Safran group), France and Sagem Morpho Security Pvt Ltd (Safran group), France “engaged in delivery of welfare services”? Admittedly, these agencies have access to personal information of the Purchaser and/or a third party or any resident of India for at least seven years as per Retention Policy of Government of India or any other policy that UIDAI may adopt in future. The purchaser is President of India through UIDAI.
 

The contract agreement is applicable to both Planning Commission’s Centralised Identities Data Repository (CIDR) of digit biometric unique identification (UID)/Aadhaar number which is ‘voluntary’ and the ‘mandatory’ National Population Register (NPR) of Ministry of Home Affairs which is also generating Aadhaar number. Notably, column number 2 in the Aadhaar Enrolment Form on page number 1 and 2 refers to “NPR Number” and “NPR Receipt/TIN Number” and at states “Resident may bring his/her National Population Register Survey slip (if available) and fill up the column” number 2.
 

The databases of both the numbers namely, UID/Aadhaar number and NPR number are being converged as per approved strategy.  Does it not make both the databases of biometric identification numbers one and mandatory in the end? Is the promise by the Prime Minister about Aadhaar Enrolment being “free and voluntary” truthful? It is not “free” for sure because it costs citizens’ their democratic rights. As to it being “voluntary” it is not so by design. It is evident that the Prime Minister has been miser with truth.      
 

Initially, it seemed surprising as to why L1, a high value company that worked with the US’ intelligence was sold to French conglomerate Safran group which has a 40 year partnership with China. It also seemed puzzling as to why the contract amount given to Sagem Morpho of Safran Group is not being disclosed. But with the disclosure of non-traceability of financial data with regard to French conglomerate’s Sagem Morpho courtesy New Indian Express and emergence of the possible relationship of UIDAI with US based agencies like In-Q-Tel  and MongoDB on the horizon courtesy Navbaharat Times, such transactions do not appear astounding anymore. 
 

Now the question is do these agencies have access to biometric and demographic data of even those residents of India who did not give consent as per column 8 of Aadhaar enrolment form for sharing information provided by them to the UIDAI with these agencies who do seem to be engaged in delivery of welfare services.
 

There is no confusion as to why such agencies of US, France and China are eager to get hold of the biometric database of Indians. “Biometrics Design Standards for UID Applications” prepared by UIDAI’s Committee on Biometrics states in its recommendations that “Biometrics data are national assets and must be preserved in their original quality.”
 

UIDAI’s paper titled ‘Role of Biometric Technology in Aadhaar Authentication’ based on studies carried out by UIDAI from January 2011 to January 2012 on Aadhaar biometric authentication reveals that the studies “focused on fingerprint biometric and its impact on authentication accuracy in the Indian context. Further, improvements to Aadhaar Authentication accuracy by using Iris as an alternative biometric mode and other factors such as demographic, One Time Pin (OTP) based authentication have not been considered in these studies.” 
 

This paper explains, “Authentication answers the question ‘are you who you say you are’”. This is done using different factors like: What you know– user ID/password, PIN, mother’s maiden name etc, What you have – a card, a device such as a dongle, mobile phone etc and What you are – a person’s biometric markers such as fingerprint, iris, voice etc. The ‘what you are’ biometric modes captured during Aadhaar enrollment are fingerprint, iris and face. It is noteworthy that this paper refers to biometric markers like ‘fingerprint, iris, voice etc’ revealing that after fingerprint and iris, ‘voice’ print is also on the radar and its reference to “etc” includes DNA prints as well.   
 

Notably, ESL Narasimhan, governor of Andhra Pradesh said, “We are spending thousands of crores on identification cards every other day and then saying it is useless card. It happened in case of citizenship card, PAN card, voter identity card and now they are coming to Aadhaar card. He was speaking at the inaugural session of fifth international conference on 'emerging trends in applied biology, biomedicines and bio-forensics'. This was reported by Business Standard on 30 November 2013.
 

Narasimhan is a former head of the Intelligence Bureau (IB). DNA analysis has become so cheap that within a few years instead of an Aadhaar, one can have whole DNA sequence with unique marker because “with a few thousand rupees, everybody's entire DNA sequence can be put on a card", argued Ramakrishna Ramaswamy, vice chancellor, University of Hyderabad, speaking at the same conference. It is noteworthy that these efforts are going in a direction wherein very soon employers are likely to ask for biometric data CD or card instead of asking for conventional bio-data for giving jobs etc. It is likely to lead to discrimination and exclusion.
 

In villages, they say when you give a hammer to a blacksmith he/she will only think in terms of nailing something. The only difference is that here it is the human body which is being nailed. If you only have a hammer, you tend to see every problem as a nail. If biometric technologies are at hand, some people under the influence of technology tend to see every problem as an identification problem.
 

The UIDAI paper states, “Of the 3 modes, fingerprint biometric happens to be the most mature biometric technology in terms of usage, extraction/matching algorithms, standardisation as well as availability of various types of fingerprint capture devices. Iris authentication is a fast emerging technology which can further improve Aadhaar Authentication accuracy and be more inclusive.” 
 

Such absolute faith in biometric technology is based on a misplaced assumption that are parts of human body that does not age, wither and decay with the passage of time. Basic research on whether or not unique biological characteristics of human beings is reliable under all circumstances of life is largely conspicuous by its absence in India and even elsewhere.
 

There is a need for the Parliament, Supreme Court, state legislatures and High Courts to examine whether or not biometrics provides an established way of fixing identity of Indians. Has it been proven? A report “Biometric Recognition: Challenges and Opportunities” of the National Research Council, USA published on 24 September  2010 concluded that the current state of biometrics is ‘inherently fallible’. That is also one of the findings of a five-year study. This study was jointly commissioned by the CIA, the US Department of Homeland Security and the Defence Advanced Research Projects Agency.
 

Another study titled “Experimental Evidence of a Template Aging Effect in Iris Biometrics” supported by the Central Intelligence Agency (CIA), the Biometrics Task Force and the Technical Support Working Group through Army contract has demolished the widely accepted fact that iris biometric systems are not subject to a template aging effect. The study provides evidence of a template aging effect. A “template aging effect” is defined as an increase in the false reject rate with increased elapsed time between the enrollment image and the verification image. The study infers, “We find that a template aging effect does exist. We also consider controlling for factors such as difference in pupil dilation between compared images and the presence of contact lenses, and how these affect template aging, and we use two different algorithms to test our data.”
 

A report “Biometrics: The Difference Engine: Dubious security” published by The Economist in its 1 October 2010 issue observed “Biometric identification can even invite violence. A motorist in Germany had a finger chopped off by thieves seeking to steal his exotic car, which used a fingerprint reader instead of a conventional door lock.
 

Notwithstanding similar unforeseen consequences Prime Minister’s faith in biometric remains unshaken. It seems that considerations other than truth have given birth to this faith. Is there a biological material in the human body that constitutes biometric data which is immortal, ageless and permanent?  Besides working conditions, humidity, temperature and lighting conditions also impact the quality of biological material used for generating biometric data. Both Aadhaar and NPR are based on the unscientific and questionable assumption that there are parts of human body likes fingerprint, iris, voice etc” that does not age, wither and decay with the passage of time.

Those who support Aadhaar and NPR seem to display unscientific temper by implication.

Unmindful of this all the political organisations and institutions of government who supported imposition of emergency are likely to support biometric identification project as it helps build a permanent emergency architecture which was conceived during the imposition of internal emergency.  

 

You may also want to read…

 

Why biometric identification of citizens must be resisted? Part I
 

Biometric identification is modern day enslavement -Part II
 

Biometric profiling, including DNA, is dehumanising -Part III
 

Marketing and advertising blitzkrieg of biometric techies and supporters -Part IV
 

History of technologies reveals it is their owners who are true beneficiaries -Part V
 

UID's promise of service delivery to poor hides IT, biometrics industry profits –Part VI
 

Technologies and technology companies are beyond regulation? -Part VII
 

Surveillance through biometrics-based Aadhaar –Part VIII
 

Narendra Modi biometrically profiled. What about Congress leaders?-Part IX
 

Aadhaar: Why opposition ruled states are playing partner for biometric UID? -Part X

 

Is Nandan Nilekani acting as an agent of non-state actors? –Part XI

 

Aadhaar and UPA govt's obsession for private sector benefits–Part XII

 

Are Indians being used as guinea pigs of biometric technology companies? -Part XIV
 

(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)

User

COMMENTS

jutamaro

3 years ago

Without Aadhar Card one will not get LPG Cooking Gas subsidy after March 31, 2014. In the State of Uttar Pradesh, no further Aadhar Card are being made. The route to get the same is via NPR which in Lucknow is yet to be completed when the census had already been done in June 2010. At this rate new entrants will get their Aadhar Cards maybe sometime in the year 2015. Until then they will have to do without LPG cooking gas subsidy?

Abhijit Gosavi

3 years ago

With statistical algorithms used in machine vision, there can be a very HIGH probability that two or more different instances are captured to have the same data in the database! That's because these algorithms are far from perfect. Plus, how the data is captured can vary from one software program to another. They work fine for tasks such as hand-writing recognition (used by postal services) or deciding if a batsman is LBW in cricket :) Using them for Adhaar will be a blunder for sure!

Mukesh kamath

3 years ago

So google search of aadhaar news brings me to this page which is a little bit of a cheating as the title "Express yourself in forum, comment on articles" has no relation to what follows in the article. SEO. What irritates me the most is that this site administrators and article authors start replying to mundane comments of ordinary mortals. Too much space occupied by comments in large font size and empty space too. Needless to say the site wastes so much of real estate on the screen. I support the aadhaar project and I did not read this article at all. I know what most of it means. Propaganda and nothing that matters. Someone rightly said ML has gone bonkers over aadhaar.

REPLY

Abhijit Gosavi

In Reply to Mukesh kamath 3 years ago

My friend, the algorithms used in these software are far from perfect and are known to fail with some probability. That probability is likely to be high when there is a population of a billion people. It's one thing to use them for harmless tasks such as handwriting recognition or making LBW decisions in cricket, but they can lead to great confusion in a project such as Adhaar. If Moneylife is fighting a war against Adhaar, I must compliment them on this! Machine vision scientists have been saying this for years, and honestly I don't know of too many news organizations that have taken the trouble to examine the underlying scientific issues.

Ravi S

3 years ago

Opponents of Aadhaar believe that snooping / surveillance cannot be done without Aadhaar. Narendra Modi (CM of Gujarat) did the extensive (every minute) snooping of a female Architect (his girl-friend as per SC petition) not only on land but also in airplane in the year-2009 i.e. before existence of Aadhaar. How this snoop-gate happened? Because intentions of the powerful in government matter a lot!
http://timesofindia.indiatimes.com/tech/...
https://en.wikipedia.org/wiki/Surveillance
http://edition.cnn.com/2013/07/17/opinio...
http://www.scu.edu/ethics/publications/s...
http://www.wisegeek.com/what-is-electron...
http://www.ico.org.uk/for_organisations/...

REPLY

Ram Das

In Reply to Ravi S 3 years ago

Dear Mumbai one

Answers
1. UIDAI Owns all Aadhaar data. Biometric suppliers have no rights to any data. Their software is operated by HCL. This is akin to MS office running on your PC. Microsoft does not own your data. For proof, please read original tender for acquiring biometric software.
2. Legality. Yes, UIDAI Is still being operated under executive order. We must get parliament to decide one way or another. However, it is incorrect to say that executive order is no longer valid. Pls check with any constitutional lawyer.

Mumbai One

In Reply to Ravi S 3 years ago

Aarreeeeeeeee PR Maharani of UIDAI and Nandu...you are back with your idiotic posts...
Come on...Just answer two Qs (I know your brain is not empowered to take more than it)
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.

One more for your washed brain... What Narendra Modi has to do with the UID issue?

Ravi S

3 years ago

Aadhaar status {verifiable with UIDAI website portal (dot) uidai (dot) gov (dot) in}
People registered: About 650 million (65.0 crore) i.e. over Half the population,
Aadhaar assigned: About 520 million (52.0 crore),
Population of India: 1,250 million (125 crore or 1.25 billion),
Average Aadhaar rate: 1 million/ day,
Milestone planned: 600 million Aadhaar by March-2014,
Remaining Enrollment of 650 million continues thru NPR (Ministry of Home Affairs - Census Operations - RGI) in illegal migrant infested states and populous states like UP, Bihar, J&K, W. Bengal, TN, Arunachal, Assam, Mizoram etc. Enrollment thru NPR is done only for Citizens after weeding out the Illegal migrants.

REPLY

Mumbai One

In Reply to Ravi S 3 years ago

Aarreeeeeeeee PR Maharani of UIDAI and Nandu...you are back with your idiotic posts...
Come on...Just answer two Qs (I know your brain is not empowered to take more than it)
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.

Ravi S

3 years ago

Who is afraid of Aadhaar & Why?

As the public databases are getting inter-linked one by one thru Aadhaar Number in various States (particularly Delhi, Maharashtra, Andhra), we see the following effects:
1. Middlemen & Officials are finding difficult to continue with corruption in public welfare pensions, scholarships, public health, NREGA, subsidy on PDS Ration, Kerosene, LPG etc.
2. Ineligible, duplicate and fictitious beneficiaries are getting eliminated from public welfare programs.
3. Corrupts will find difficult to buy & sell benami land & building (i.e.under fictitious name).
4. Corrupts will find difficult to open & operate benami companies for money-laundering.
5. Corrupts will find difficult to open & operate benami bank accounts for keeping black-money.
6. Tax-evaders will find difficult to evade taxes.
7. Impersonation & proxy will be difficult to commit.
8. Criminals & Terrorists will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc.
9. Illegal Immigrants will get detected and tracked thru inter-linked databases of mobile phone, bank account, travel documents etc. They will have no place to hide on Indian soil.
10. It will get difficult for Criminals to hide as records are getting accessible to Police from any State of India.
11. It will get difficult to obtain another new Driving License and Arms License from another State once it got impounded.
12. Fraudsters will not be able to steal Provident Fund money.
13. Onion Hoarders will get tracked easily.
14. Dummy candidates will not be able to write competitive exams for others for the sake of money.
15. Ineligible people will not be able to misuse the certificates of income, domicile, education degrees and caste to deprive the eligible people.

REPLY

Mumbai One

In Reply to Ravi S 3 years ago

Aarreeeeeeeee PR Maharani of UIDAI and Nandu...you are back with your idiotic posts...
Come on...Just answer two Qs (I know your brain is not empowered to take more than it)
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.

BTW...Why is UIDAI afraid to reveal its contracts with spy agencies? Have guts then put it in public domain or just SHUT UP

Ravi S

3 years ago

Please read 'Aadhaar' article on Wikipedia or UIDAI website. It provides ample knowledge. It can answer almost all queries.

REPLY

Sandeep

In Reply to Ravi S 3 years ago

Ravi, I am big supporter of UIDAI project and it's infact a real working lokpal bill. I see your post alomost every website and assume you're somehow linked to this project or being a techy(guessing) person you can visualize the benefit of this one, so please keep an eye on Wikipedia page also because since SC has started hearing this case, people who want to fail UID keep on reverting the facts about UID at Wikipedia page and replace thta with negative misleading information. thanks for doing the good work.

Mumbai One

In Reply to Ravi S 3 years ago

Aarreeeeeeeee PR Maharani of UIDAI and Nandu...you are back with your idiotic posts...
Come on...Just answer two Qs (I know your brain is not empowered to take more than it)
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.

Ravi S

3 years ago

There are 3 types of Opponents of Aadhaar : 1. Ignorant, 2. Politically motivated, 3. Criminals (beneficiaries of corruption, terrorists, immoral like Asaram and son).
Type-1: Ignorant: No understanding of socio-economic problems, IT systems and corruption that have been impeding progress of India for the past 7 decades.
Type-2: Politically motivated: Propagandas, Rumor mongers. They oppose everything of another political party whether good, bad or ugly.
Type-3: Criminals: They do not want to be identified and tracked. Beneficiaries of corruption. Terrorist Yasin Bhatkal would have got caught years ago had he been registered with Aadhaar. Rape convict Biti Mohanty (son of Odisha DGP) would not have been living under different identity for years after jail escape. Restaurants would not be running on subsidized LPG and diverted PDS ration depriving the poor people.
Aadhaar is now irreversible by any corrupt force as over 500 million have been assigned and 600 million registered (half the population of India) as of Nov-2013.
Similar mind-set of people also opposed computerization of Banks, Rail reservation and Administration 25 years ago. Today we enjoy rail reservation and bank ATM anywhere anytime.

REPLY

Mumbai One

In Reply to Ravi S 3 years ago

Aarreeeeeeeee PR Maharani of UIDAI and Nandu...you are back with your idiotic posts...
Come on...Just answer two Qs (I know your brain is not empowered to take more than it)
1. Who owns the UID database? Is it the Indian govt or private agencies/firms?
2. Which is the law that regulates the collection of biometric data, and Aadhaar itself? Don't hide behind the lapsed executive order as any such thing become irrelevant after six months.

Usha Pillai

3 years ago

Is there ever a possibility of a living person's fingerprint matching that of a deceased person, related or unrelated? Has any study been done on this aspect anywhere in the world?

Lending to MSMEs by banks: Some bitter truths

MSMEs being the backbone of economy have been in need of funds to grow themselves but banks have adopted an approach which has failed to meet their needs

When it comes to lending for business activities, banks tend to prefer large business entities to small players. This bias comes from the fact that big businesses have better assets and the possibility of failure of these businesses is less compared to small business enterprises. In order to gauge this preference of banks conversations with a small business enterprise, often referred to as micro, small and medium enterprises (MSMEs) says it all. For a micro and small business, to get loan from a bank is nightmare. This has been happening in spite of dedicated MSME branches set up by various banks and MSME lending being a part of priority sector lending.
 

RBI data in this regard is an eye opener. More than 92% MSMEs run their business on self-finance and have no source of institutional finance. The chart below shows that:
 


It is obvious that small businesses require funds as they have limited source of self-financed capital. Idea of schemes such as Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) came from this but somehow could not acquire acceptance from the banks in general. Though loans were given under CGTMSE, the number has been very insignificant compared to the size and scale of MSME business operations.

But this is not all.

 

There has been always a demand and supply gap in lending to MSMEs. MSMEs being the backbone of economy have been in need of funds to grow themselves but banks have adopted an approach which has failed to meet their needs. The chart below shows the demand supply gap which seems to be narrowing in days to come but still very sizeable by any stretch of imagination:
 


What is extremely surprising is that MSMEs don’t perform badly compared to the big business houses when it comes to performance on the payment of loans. The data available in this regard shows that percentage of impaired assets have been rising for medium and large business while it has been relatively stable for micro and small business.
 


So, there is no apparent reason for banks to show preference for large businesses as their performance on impaired asset front has been growing bad to worse. What is it that is preventing banks from lending to MSMEs? Most apparent reason is that banks to play safe and don’t want to add to their non performing assets (NPAs). The unfounded fear comes again from the fact that small business will default. But this logic gets weakened in some cases. Even in cases when credit guarantee is available through CGTMSE, banks are wary of funding of MSMEs because of the fact they don’t want any hassle in claiming guarantee benefit in event of a default by a micro or small enterprise.
 

Recently, while delivering a keynote address at the Training Workshop on Credit Scoring Model with support from IFC for MSE Lending in Mumbai on 29th November, Dr KC Chakrabarty, deputy governor, Reserve Bank of India (RBI) said that credit scoring model will go a long way in promoting credit facility to MSMEs. But the key question is can lack of will to fund MSMEs will addressed by a strong statistical model. There is a need to fix accountability for lack of funding of MSME business by banks. For instance every bank can be asked to offer collateral free lending first to MSMEs under CGTMSE before the bank asks for security for any lending.
 

Last but not the least, let MSMEs also understand their responsibility towards lending done by banks. They must act with full responsibility to ensure that loans are paid on time on them and wilful default does not become order of the day.
 

(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)

User

COMMENTS

Jerin Chacko

3 years ago

Forget collateral for loans, Banks insist on collateral even for issuing a Bank Guarantee to the average firm!

nagesh kini

3 years ago

Vivek is bang on!
The repayment record of the Tiny and SME sectors are far better as the borrowers are more particular about their reputation and credibility issues that the big ticket willful defaulters give a go bye and the MOF/RBI choose to conveniently overlook.
The banks drag the small borrowers to DRT/SAFRESI at the drop of the hat including locking up and attachments. Why nothing whatsoever for the top defaulters?
I know of a genuine SME harassed by the Saraswat Coop. Bank by hyping up highly inflated unsubstantiated demands and the matter has been dragging on and on. The unit is among the 92% self financed now!

REPLY

Srinivas

In Reply to nagesh kini 3 years ago

I agree - the SARFAESI act was one of the first nails in the SME coffins.

Srinivas

3 years ago

In spite of the CGTMSE scheme which underwrites all loans to the SME sector, banks insist on collateral for all loans. So that makes a mockery of the scheme, the bank charges you for providing you a loan under that scheme, takes collateral from you, and actually can show the entire loan as doubly secured - one with your collateral and one because GOI has underwritten it under the scheme !

Sad but this is the truth - as is the case with the USA and other economies, the banks are playing a significant role in ensuring that this sector which provides maximum employment due to their semi-skilled nature will die out.

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