The government said, 'We would like to clarify that CapitaWorld was acquired by public sector institutions through a transparent process and it is now owned by banks and not private individuals'
New Delhi: The Union government on Tuesday hit back hard at the political attacks and the insinuations of favouring a private company with regard to Prime Minister Narendra Modi’s much talked about ‘Loan in 59 minutes’.
Dismissing the opposition’s arguments, the government said that the automated finance platform CapitaWorld is almost owned by public sector institutions. The government further stressed that a bidding process decided ‘capita world’ as a service provider for the 59 minutes’ loan and not favouritism as suggested.
So what’s the controversy all about?
Political parties, mainly led by the Congress suggested, if not accused, the government, that the ownership pattern of the company led to it getting the contract.
The core of Congress's argument is, the service provider in question has a ‘…director on board - Vinod Modha. A strategic adviser for corporates including Nirma and Mudra (owned by Anil Ambani)’.
Ruchi Gupta, a Joint Secretary in the All India Congress Committee (AICC), took to twitter to call it a ‘scam in the making’.
Do read, scam in the making. Modi Govt claims that SMEs will get loans online in 59 mins. In reality, pvt company, CapitaWorld registered in Gujarat w/ links to Ambani, Modi 2014 campaign simply collecting private financial data & charging fees while doing so. Remarkable if true pic.twitter.com/osPehcacev
— Ruchi Gupta (@guptar)Farfetched as the argument may seem, sources in the Finance Ministry retorted by saying, "Mr Modha is not a Director on the company, although he has a minority shareholding. Mr Vinod Modha was associated with Nirma group prior to 2005."
In fact, in a tweet, the Small Industries Development board of India (SIDBI) also said the same.
Vinod Modha not a director. Holds a negligible minority stake.
— Small Industries Development Bank of India (@sidbiofficial)Another concern that was raised was about the ownership of the company. It was suggested the contract was handed over because of Anil Ambani.
Not to forget the ongoing tussle and acrimonious equation between the Congress and Anil Ambani due to the offset clause in the Rafale deal that the opposition has raised many a time to accuse the government of crony capitalism only to be rubbished, not only by Dassault, the Rafale jet maker, but also the French President Emmanuel Macron.
This time too, the facts were dished out by the government that were exactly the opposite of what the claims were.
A Finance Ministry source said, “We would like to clarify that CapitaWorld was acquired by public sector institutions through a transparent process and it is now owned by banks and not private individuals.”
If that wasn’t enough SIDBI posted this to crush the argument of favouritism.
The company capitaworld owned and controlled by sidbi and 5 PSBs. 4 out of 7 directors are public sector shareholders nominee.
— Small Industries Development Bank of India (@sidbiofficial)The company in question set up psbloansin59minutes.com, a platform to sanctions loans. The loan-seekers need to fill up forms and provide details on this website. Many accused of a possibility of data theft. This also had a sense of believability among the masses after web transaction portal Paytm and others were alleged to have compromised customer data.
A highly placed source in the ministry of finance told MyNation, “The company has well-stated data privacy policy which is hosted in its website. The company doesn’t store any credentials of users in respect to third-party databases. The portal only supports the uploading of reports by the applicant after downloading from databases.”
Ahead of the 2019 general elections, this scheme of Prime Minister Modi promising to approve loan requests of up to Rs 1 crore for small and medium-sized businesses within 59 minutes is seen to be a major game changer.
Targeting the middle-class and upwardly mobile entrepreneurs, this scheme is seen as a boost to not only ease of doing business for the tycoons but for wannabes as well. But, it seems a section of the opposition jumped the gun this time to cry ‘scam in the making’ where as far as hard facts are concerned, none exists.
Read Exclusive COVID-19 Coronavirus News updates, at MyNation.