Gopinath:- The Asian markets are having a sea saw effect after hearing the news of USA losing AAA ratings. Even France to lose AAA ratings! I wonder how France can still show the courage to bail out Greece. The recent hooliganism in Syria as well as in UK will also affect the global economy. Moreover, the Spaniards are becoming jobless now. After Greece, many people predicted about Spain & Portugal and it is becoming a reality now. The concept of Euro has failed to revive the European economy.
Manjulika:- So, are we heading for a double dip recession? If yes, then are we ready to face it?
Gopinath:- India and China have learnt the art of investing more on their own core competencies during the recession of 2008. That’s why; Indian Tigers are chasing the Chinese Dragons. As a result, China has started investing in Sri Lanka, Myanmar, Nepal and some countries of Africa to safeguard themselves from Indian Tigers.
Arindam:- So, you want to say that Indian Tigers (common people of Indian economy) are in a very healthy position. Maybe, I think that Indian government is showing too much confidence on FDIs and as a result focusing less on manufacturing and mining industries. The outcome of this complacency factor has indirectly created a gap between poor and rich. Moreover, the UPA-II completely failed to control black marketers & hoarders. Rich people are paying more for foods and the food supply is less in the open market. As a result, the food inflation rises. RBI, being frustrated with the callous initiatives of the UPA-II, has to increase the key rates every time to curb inflation. But, at present, as the USA lost its AAA ratings, some PSU Banks will not try to raise money from overseas immediately. RBI will also not raise any of its key rates in the next meet, as there is a concern of double dip recession. In this hotchpotch scenario, why UPA-II is instructing the RBI to make all banks NPA free? Rescheduling all the suspended loans mean you are increasing the repayment period of loans for another 2 years. As a result, the money is not recovered but the Banks are saying that they are NPA free. After 2 years, when UPA government will not be there, who will be liable for the loss? It is the respective PSU Banks and the RBI only.
Manjulika:- Indira Gandhi nationalized those banks to raise funds for Indian economy. Manmohan Singh went for economic reforms. That was good, but somehow, the recent scams and the black money in Swiss Banks have negated those reforms. India would have become the 3rd largest economy by 2012 had there been no financial corruption at the top level. Now, UPA-II came out with a Banking Bill where they can either privatize nationalized banks or centralize all the PSU Banks. Profitable PSU banks may get merged with loss-making PSU banks or maybe the loss-making PSU banks will be completely denationalized. See, the Manmohan’s cabinet is a puppet of USA. So, it is evident that the UPA-II will blindly follow the policies of USA. The Indian government is saying, ‘If private banks can survive, then privatize all the loss-making PSU Banks.’
Gopinath:- Just hang on! Are those private banks opening no-frill accounts for the poor people? Are they giving subsidies while giving agricultural loans to the poor farmers? Without PSU Banks, banking development of Indian poor society cannot happen. US Banks thought of profit only. That’s why; their unemployment problems at the root level still exist. The best feasible solution will be to merge some loss-making PSU banks under SBI on a trial basis. But still, I will say,”BEWARE! BANKING BILL!”
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