The Bhutanese Leading the way.
The Phajo Nidup case running into now around Nu 800 mn NPL is no longer about just bad loans and double and triple mortgages, but also about bribery at a large scale running across several government agencies.
The bribery questions the sanctity of the Thrams in the NLC and Thromdes, the safety of how our bank deposits are lent out, how RSTA guards blue books and more.
For long, we have taken pride in the fact that while we do have corruption, it is not pervasive like in other South Asian countries.
However, the Phajo case shows that our officials in various agencies are ready to make dangerous compromises for a few bucks.
The Phajo case, in essence, shows that the vulnerabilities are not only at the higher levels in terms of leadership, but also at the mid and junior levels which are concerned with implementation.
In the NLC, the internal controls need to be strengthened to ensure that Thrams cannot be played around like this. The online Land Management System is a big improvement as it will help prevent double mortgages.
Among the banks there is a requirement for deep introspection on why its staff and system allowed such obvious mistakes and why were these not caught.
For ordinary people it is quite difficult to get a loan, but a person like Phajo with some money thrown here and there could make a fool of the whole system and build an enormous NPL pile.
This is also not the first banking lapse as there have been many others in the past.
It also begs the question if all our NPLs are really as innocent as they sound or there is something more to it.
The Phajo case should be an important lesson that shows us the weakness not only in our systems, but perhaps also in the people in key positions at the implementation level.
A bad system will beat a good person every time.
W. Edwards Deming