Illegal banking

Not too infrequently greed gets the better of man. The tantalising possibility of making a fast buck would put blinkers on his ability to see through the charade and he would happily walk into the con man's trap, as did thousands in some old districts of central Punjab. They, numbering about 3000, deposited huge sums of money with Syed Sibtul Hasan, alias Double Shah, to be doubled in 70 days.
Some 20 months back the Double Shah launched his scheme with the promise to double the deposit in 15 days, but as his business flourished and the operation had to be conducted with the help of agents, the time for doubling the deposit was extended to 45 days, and then to 75 days.
The extension in time neither discouraged the potential depositors nor deterred the ones already in his trap who would very often re-deposit their principal plus the profit. Double Shah had started this business of doubling deposits from Allahabad, a nondescript town near Wazirabad, but it soon caught the fancy of the people throughout the districts of Gujranwala, Sialkot, Narowal and Gujrat.
Operating from behind protective walls, reportedly provided by the local police, Double Shah would not default even for a day on his pledge, earning in return his depositors' unshakable faith in his financial wizardry and propriety. As the name and fame of the Double Shah spread, the people from the area started shifting their deposits from the local banks to his illegal bank. Some of his clients, in fact, got loans from normal commercial banks and gave the monies to him to be doubled.
According to reports, some bank branches lost up to 10 percent of their clientele to this aggressive banker who introduced the weird art of hush-hush, don't tell banking. But when the worried local bankers met in a special meeting to firm up a counter-strategy last month, the administration went into action and arrested Double Shah for running the dubious business.
The National Accountability Bureau (NAB) is now investigating the sordid drama of defrauding such a large number of people. But, ironically, the very same depositors are holding demonstrations, blocking roads and picketing the local political leaders, to build pressure on the government for immediate release of "Shah Sahib".
Double Shah's operation was not something entirely new in Pakistan. In the past too, a number of times foolishly greedy people have been cheated by such fraudsters, sometimes in the name of finance companies and sometimes for providing employment to the "brilliant but unemployed" scions of middle class families as the co-operative societies did.
Then there was Samad Dadabhai's money multiplying scheme also. As long as money keeps coming in amounts larger than the cash outflows, these Ponzi schemes flourish, but their ultimate fate is predetermined as the business always results in a disastrous crash. Usually by then, the principal fraudster would have gone missing and the assets of the enterprise grossly squandered. Litigation follows, resulting in insignificant compensations to the affected clients.
However, in the case of Double Shah's banking there is a departure from the previous incidents. In his case, the NAB intervened when the enterprise was operational and deposits are, therefore, hopefully recoverable to a great extent. The assets of the principal accused are said to include a number of hotels and casinos in the Gulf States and about a dozen and half gas stations in Punjab.
That claims have been invited from the affected depositors is definitely a positive step, and it is to be hoped that the people would offer cooperation to the authorities instead of impeding their work by holding hostile protests. With the NAB in action, it is expected that the offenders who violated the law of the land by running unlicensed banking would be severely dealt with.