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Wednesday, June 7, 2017

The corrupt Indian Banks, Demonetization & promises by the Government to waive Farmers’ loans:

Where does the common man paying taxes stand in this chaos?

It has been more than 1 year since I have been hearing of NPA mess created by Indian Banks, both by Public Sector as well as Private Sector by lending loans to inefficient and corrupt corporates. Naturally, it raises a doubt that the bank authorities who had sanctioned these bad loans must have been corrupt too. Isn’t it? Whose money it was? The money was out of deposits; the deposits belonging to people of the nation.  Although these bad loans were created during the Congress ruling regime, it is the Bank Authorities and consequently Banks should be held responsible and should be made to pay the price for it.  On the contrary it looks like the current BJP ruled Indian Government has decided to save these banks despite their bad and irresponsible behavior. Of course, the government’s intention is pretty obvious and save the economy from being collapsed or being pushed on to the slow track of growth, due to failing banks, which would have consequential effect such as failure of a banking system, rising unemployment and the growth of black economy. The question comes to my mind and which is quite natural is that who is going to pay the price for all this mess!!!

The government smartly flipped a coin of ‘Demonetization’ to fuel the banks with cash. Because the NPA’s created by banks were so high that in case depositors had decided to withdraw cash they had in credit to their accounts, perhaps banks would have been exposed of their inability to return the public money. Also it would have been difficult for the banks to generate fresh credit in the economy to push for it’s contribution in the industrial development and also it’s own survival. So the Government decided to infuse more cash in these empty banks, and how did the Government do? By forcing people to deposit their cash holdings into the banks. People did it willingly and also did not make much fuss about it, due to our overwhelming support to the honorary Prime Minister Mr. Narendra Modi. But the reality is, do these banks deserve this public money after screwing public trust in the past? I think it would not be improper for the people to withdraw these deposits in cash and hold it at home again. The first supporting reason is that, after depositing this black turned white money has already been reported to the Banks and the Government, so now whether one holds it in a cash form or as a bank deposits does not make much difference. However, holding cash in hand gives an advantage over depositor’s funds been misapplied by the corrupt banks. One would have better security of his/ her own funds. I don’t think the government would trigger another demonetization in another 3-4 years at least. Other better option I could think of is to transfer these funds from the banks to the Post Office accounts, which would be providing more security in comparison to the bank deposits.
These problems were not enough, the government promised in it’s election campaign in UP to waive farmer’s loan. If the government can waive farmer’s loan from the one state then the question arises is that why cannot it do that with the farmer’s in the other state. It has resulted in the farmer’s strike in the state of Madhya Pradesh and in the state of Maharashtra. Yesterday, during the strike and demonstration in Maharashtra 5 farmers were shot dead by the RPF (Reserved Police Force). One must think if government waives off the farmer’s loan, the Banks would have to write those assets off their balance sheet; from where all this money would come, naturally from the common man’s deposits. The Public Money. In short Public has to pay Taxes, Public has to give deposits to the Banks, and the Banks would keep abusing these deposits and get fatter and fatter being protected by the government.

Although I am of the opinion that the ruling government is the best team we have, ruling my nation, I wonder to what extent the common man would have to pay the price to clean the pre-existing corrupt system? Would corrupt bankers and the banks not get punished for their irresponsible or the negligent acts? Let us see, what plan the RBI comes up with, to resolve the NPA issues these Banks have been carrying so long time. To add fuel  into this fire, day-by-day the debts by the corporate India are being rated low.

One thing I would definitely like to underline one more time in the interest of the general public of India and that is, please ensure your hard earned money are kept at place safe, safer than the Indian Banks and the Mutual Funds companies.

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