RTI Review (5)
#2 Know Your Bank
The RBI issues Licenses to Banks to provide the Public with Statutory Money Transaction Services as Financial Intermediation Agencies. The Banks hold Public's Funds on Trust........ Chasing the Service Provider's Balance Sheet to recover your Money will leave you nowhere. You Parked your Money and you are entitled to get it on Demand.
# 5 Know Your Bank
#6 Know Your Bank
Curious Question:
The "Bankdemic Virus" (Banks' running out of Money), is not limited to Co-Op Banks, as it is been presumed to be; but, this Virus can intrude in to any variants (Public / Private / Co-Op) Banks.
Impacts of Globalisation over the RBI:
The Reserve Bank of India was created predominantly to regulate the Banking System in India. The prime objective is to ensure safety of Public's funds. The Banks will be possessed with large funds in the course of extending statutory services to the public. Moreover, the RBI is mandated to safe-guard the interests of the Depositors and Investors.
The Banks are in possession of huge funds of the public which will be in multiple times beyond a Bank's capital investment. It is the duty of RBI to mitigate any incidences of Bankruptcy of the Bank.
For over the past 2 decades, the Governments in India and the RBI, have consistently failed to analyse the impacts of the Liberalized Policies of Lending promoted through the Banks on the Public of India.
Risks over the Public's Money: That, the huge Inflow of Public's Money as Deposits for Current / Savings / Digital Transactions and the risks of its (Public's Money) Outflow as Unsecured Loans to the Corporate Segment, are not adequately acknowledged.
Globalisation policies have impacted the Banking system in two ways:
1. Inflow of Borrowers in the Retail segment of the Banks.
2. Innovative Banking modes extended to Customers of the Banks.
Moot question:
Whether the RBI, an institution created exclusively to safeguard the interest of the depositing customers and to ensure the survival of Banks will be in a position to protect the financial interests (cost of services) of Borrowers and Customers?
The Answer will be a NO. Because both are contradictory domains.
The Reserve Bank of India have been designated with "Conflict of interests" by default of the powers be.
The Reserve Bank of India had cultured itself to work with a easy go conviction,
Failure of a Bank will become a News, but failure of any number of Small Borrowers will be discounted as elimination of public nuisances.
The RBI has consistently betrayed the farmers, students and small secured borrowers and let the Banks to sweep them off as the public nuisances.
Trigger of Major Fault Line:
Dispersal of Huge Unsecured Loans to Corporate Sector is the Trigger fault line which initiates the Deterioration & Failure of a Bank.
Deterioration & Failure of a Bank will become a News; and the RBI will be under the scanner; so, How to avoid this?
The Art of Running a Bank.....
Banking Regulations - the Principles of Sacrifice:
Sacrificial Goat-1:
Small, Medium & Retail Borrowers, who are bound to take Loans by pledging Securities will be exploited and all those who are not able repay the Loans are Sacrificed.
We, the Public view these happenings just as Elimination of Public Nuisances by the Banks.
But, RTI Facts reveals that, the RBI has been consistently betraying the Farmers, Students and small Secured Borrowers of SME Sector and let the Banks to sweep them off as the Public Nuisances.
Sacrificial Goat-2:
The Depositors, who deposited their money with the Bank on Trust for Statutory Dispersals of Current / Future necessities will be Sacrificed to retain the Bank as "Going Concern".
Sacrificial Goat-3:
The Bank will be the last Sacrificial Goat.
If a Bank fails, we must realise that it had treaded a "Blood Path"
Public postures :
The Watch Dog of the Banking Sector the RBI and the Cats (Banks) will be ....
Internal Relationship:
The Watch Dog of the Banking Sector, the RBI will be patronised by the Cats(Banks)........
Last Laugh:
On any issues of the Customers/Borrowers with the Banks and the Banking Administrations - the Watch Dog(RBI) and the Cat (Bank) will come together to have the last laugh.
Not only Friends in adversity.....
The Cats (Banks) have reduced the Watch Dog, the RBI to a puppet.
“We cannot be seen as a paper Tiger” - Raghuram Rajan, RBI Governor.
In the Honourable Supreme Court of India
Two Judge Bench of Justice M.Y.Eqbal & Justice C. Nagappan, Para - 74 75 of the final order passed - in the transferred Case (Civil) No.91 of 2015 to No.101 of 2015 on December 16th 2015.
Because an informed citizen has the capacity to reasoned action and also evaluate the actions of the legislature and executives, which is very important in a participative democracy and this will serve the nation's interest better which as stated above also includes its economic interests. Recognising the significance of this tool, it has not only been made one of the fundamental rights under Article 19 but also a Central Act has been enacted into effect on 12 October 2005 as the Right To Information Act 2005.
The ideal of "Government by the people"makes it necessary that people have access to information on matters of public concern. The free flow of information about affairs of Government paves way for debate in public policy and fosters accountability in Government. It creates a condition for "open Governance" which is a foundation of democracy.
Before 18th of October 1994: In India, the Public Funds within the Banking System were utilized through the discretionary directions of the RBI in consultation with the Government of India.
The Lending Interest rates were not based on individuals but on sector-wise utilization (SME, Agriculture ..........) The sector-wise lending Interest rates were decided by the Government of India by taking into account the nature of support necessitated for a specific sector to achieve an all around Social and Industrial developments.
The Social and Industrial developments were evidently slow may be because of the delay in systemic interventions or pro-active policy responses of the Government of the day or due to some flaws/blocks in the delivery system. But, the developments were orderly may be compared to - "twines of public money being utilized with prudence and discipline to have the end product of a woven fabric".
After 18th of October 1994:
The political structure confessed its incompetence and left the Public Financial Resources to the discretionary management of banks. In the garb of Reforms and Market Economy "Cat Culture" was inherited into the system.
The Banks handled the Public Funds in their access like a Cat handling balls of twines.
Inflation and Banks:
There is a saying - "don't troop blindly to the roof like a Cat"
The Banks with lots of money at their disposal behave like cats without caring about repercussions. Blind and mindless lending policies are grabbed by the notorious elements. These elements manipulate the markets. That is why the Governments of the day are not able to address any issues related to inflation.
Bank's "Cat Culture" - led to acrimonious acrobatics.
We are entertained with visible unfettered developments without realizing that its cost and implications will be transferred over us by the Bank and the Government.
Impact - 1
Economy in tangles
The prevalence of "Cat culture" held us in a mesmerised world of fantasy.
We enjoyed the acrobatic antics of the Banks and the Government. The Banks and Governments are working without any Accountability. Both of them are enabled to transfer the cost escalations due to their inefficacies, corrupt practices and other losses over the larger public through dubious economic policies of "Market Economy".
Cost of Bank Loans:
We, the larger public more than satisfied to have access to the public funds as loans. But, we failed to recognise/evaluate the cost of such an access as loans.
Pretention at its best
No sooner, the Cats (Banks) will be released from the tangle of their(Banks) own making by the Government of the day.
The Cats (Banks) will be given a fresh lease of life through the balls of twines (flow of Public Funds) and the Cats (Banks) are going to repeat the antics.
Impact - 2
The Banks dare to take risks
Banks like Cats, are miserable in their calculations.....
Unsecured Lending of the Banks are based on futuristic calculations which goes awry for various reasons. The Banks being cushioned to transfer such unsecured lending losses over the other Small Secured Borrowers within their system through higher Interest charges. As such the banks like Cats dare to take risks.
Impact - 3
Banks as "floppy cats" :
The Cats render a great service to the humanity in the containment of "rat menace".
But, the Cat cultured Banks failed to perform this habitual duty as the Cats do.
Impact - 4
Cat is set among the Pigeons by the Government of India and RBI :
The Small Borrowers, who have pledged their securities are treated as pigeons by the Banks in India.
The Banks are at their predatory best against these Pigeons.
Impact - 5
The Banks like Cats can tune themselves to deafness ........
Millions of Farmers suicides, devastation of SSI Units and cries of ordinary Secured Borrowers have gone into deaf ears for the past two decades.
RTI Scan Report of the Banking System in India:
Since, Liberalisation & Reform policies were adopted in the Banking Sector,
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The subsequent Governments in India failed to put in place systemic Checks & Balances to mitigate the Siphoning-off of the public funds within the Banking System, as loans.
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The subsequent Governments in India failed to check the banks from transferring their losses, inefficacies and fraudulent loan dispersals through high lending interest rates over the other Borrowers within their system.
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The Government in India, Supervisory institutions of the Banking System - The Reserve Bank of India (Regulator), The Central Vigilance Commission (Vigilance), The ICAI (Audit), all of them will ensure the survival of the Banks at the cost of public interest. The public will be left in the lurch.
Cover-ment Man
