Arundhati Bhattacharya, chairman of State Bank of India, attends the Annual Bankers’
When she was a village branch manager in eastern India, she was quick to grab a screwdriver to fix power outages. Now, as the most-powerful woman in Indian finance, Arundhati Bhattacharya must tackle the highest bad-loan ratio among India’s 10 largest banks.
Appointed in October as the first female chairman and most-senior executive officer of the country’s largest lender, State Bank of India, Bhattacharya has been combing through balance sheets riddled with 678 billion rupees ($10.9 billion) of bad debt. Some 5.7 percent of total loans at the 207-year-old behemoth are nonperforming, the highest level in at least eight years, the earliest date for which data are available, exchange filings show.
Indian Finances Most-Powerful Woman Tackles Bad Loans

Our correspondent Andreas Frank points out efforts by the US Financial Crimes Enforcement Network to crack down on money laundering by using the Patriot Act.  Jennifer Shasky Calvery, director of the network, wants to put more muscle behind it.  Calvery noted:  TV watchers know Saul Goodman simply as a sleazy lawyer. But there’s a more formal way to describe the character played by comic actor Bob Odenkirk on the hit series “Breaking Bad.”  Saul Goodman would be a third party money launderer.”

Calvery was illustrating the point that money laundering by third parties is a growing concern at Fincen.  “Third party money launderers are professional money launderers,” Calvery said at an anti-money laundering conference in Miami. “Using their connections, professional expertise, and influence, third party money launderers transfer funds on behalf of others, knowing that the funds are involved in illicit activity.”  She described various schemes that these individuals use to infiltrate banks, including “using false documentation.”

For the uninitiated, “Breaking Bad” is about a meth producer in Albuquerque, N.M. Saul Goodman is the drug dealer’s lawyer. He eagerly creates false documents in order to launder money, and also serves as the show’s comic relief.

“I’ll generate false currency transaction reports out the wazoo,” Goodman exclaims in one Season 3 episode, “as well as the necessary W-2Gs, and a couple of casino managers who will jump at the chance to report false losses. It’s a win-win for everyone!”

The dramatic arrest of the head of the Mexican drug cartel, Sinaloa, which counts for 30% of drugs illegally entering the US can give false hope.  “El Chapo’ Guzman was the country’s leading drug dealer, but for years both the DEA in the US and the Mexican government gave him a pass in return for information.  What are the consequences of these deals in terms of the long term control of drug cartels?  Can control be achieved with information gleaned from sources other than the drug cartels themselves?  It is difficult to say.  But perhaps ending the privileged relationship with Guzman’s organization is a good first step.  Unfortunately a cell phone call did Guzman in.  Let’s hope this does not give the NSA a boost.

by Fernando Llera