The Shaky Banking Sector

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The Shaky Banking Sector

Swapnil Bharali | October 19, 2019 18:32 hrs


 

Given the PMC Bank crisis and its fallout thereafter whereby two deaths and a suicide have been attributed to the truncation of transactions, the concern today is whether banks in India are safe keepers of our money. A friend of mine recently shared on our common WhatsApp group a photo of his bank passbook which, for an instance that had no precedents throughout his relationship with the bank, bore a stamped disclaimer that in case of liquidation, the bank’s liability to its customer would be no more than Rs 1,00,000/- and any higher balance that could be there would be irrelevant.


The animated discussion that followed on the group is worrying indeed given the not-so-enthusiastic economic conditions currently prevailing in the country. The discussion ranged from whether banks are safe at all, whether private banks are less safe and nationalised banks should be preferred - at least when it comes to the fixed and other term deposits.


This situation where apprehensions are catching on quicker than warranted made me recall those initial days of the NDA government’s earlier term where the thrust to open bank accounts was massive. Banks, both private and nationalised, got their executives to reach out to the country’s huge non-banking populace in the rural areas where they were virtually expected to “force” people to open accounts. The huge number of Jan Dhan accounts, remember? The enthusiasm was great and the number of bank account holders multiplied in geometric proportions. The enticement was that each such account holder would also be given free insurance on their debit cards. 


Today, it is a rather different scenario, isn’t it? Today, it is a scenario where the country’s finance minister’s husband (an accomplished economist in his own right) could well be quarrelling with his wife over dinner about the policies she is adopting to set the country on the path to becoming a $5 trillion economy and perhaps explaining to her how and why she is not getting it right. 


The problem is no one today seems authoritative or competent enough to explain what is happening to the Indian economy. And the banks acting shaky is indeed adding to the deprivation of happiness that we are seemingly undergoing. When our own hard earned savings after paying all taxes does not seem to be ours, it truly becomes a matter of concern.

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