"Let Us Bell The Cat"



Monday, 14 June 2021 14:59

Failure of RBI

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.


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