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Tag Archives: Banking

Bank on Government’s Social Agenda

Comments Off on Bank on Government’s Social AgendaPosted by on March 4, 2011

It has always been nice to hear the Central Banker of the country talking and favouring financial inclusion despite of tremendous pressure in favour of financial consolidation. Though, this does not down size the importance of Financial Consolidation, looking into type of competition the banks or rather banking sector in locked into.  The prospective change in policy, when it comes to granting license to Banks to operate, towards asking them to commit themselves to Governments’ social agenda of Financial Inclusion is again an august step.

 

Four decades succeeding the bank nationalization, have just succeeded in provide access to banking services to barely 30,000 out of 6 Lakh habitations. This clearly means the huge task that banks still have to complete. Looking into achievements of banks one may infer as if the banks were just paying lip service to governments agenda of financial inclusion.

 

Central Bank, should perhaps consider asking new bankers to have their headquarters located in one of 570000 habitations, which are still facing financial exclusion. As this will automatically initiate what is called as seepage economy at those places and in process will gradually attract more bankers and other stakeholders in the development process there.

 

Due credit goes to the backing given by Prime Minister Manmohan Singh to the Central Banker of the country, which forced even union finance ministry to a bit down on its focus towards financial consolidation. Though finance ministry, still wants to stick to financial consolidation, as Union Finance Minister Pranab Mukherjee could not abstain himself from containing in Financial Bill 2011-12 presented by him in the Parliament on February 28, 2011.

Always Yours–As Usual—Saurabh Singh

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AHEAD FROM PREVIOUS POST [Bank of Japan back in stimulus mode……]

3 CommentsPosted by on October 14, 2010

…………….AHEAD FROM PREVIOUS POST

[i.e., Bank of Japan in Stimulus Mode]

The case of Bank of Japan and that of the Federal Reserves at USA turns to be a clear example of  two events, i.e, First being What is Meaning of Zero Interest Rate Regime and Second it demonstrates a great wide valley of interest rate deferential being created among Developed Economies on one side and Emerging Nations Economies on other side. The same was very much visible in the recently concluded IMF Meet of Finance Ministers and Central Banker of these two clear groups.

The two self styled protagonists to name United States of America for Developed Economies and the other one being China for Emerging Economy Nations, could not reach any point of consensus to overcome currency war spread across the Globe. In the ensuing blame game, on one hand USA was requesting IMF-World Bank to make and keep a through visible on currency valuation and exchange rate in China; China spread its worry and held United States of America responsible for destablinsing the economies of the nations grouped as emerging economies. China claimed that it was not only the alone case of what USA managed in Brazil, but China and India too are not being spared.

Few of nations coming under Emerging Economies out of a list of Twenty Eight now are taking the measures to start putting a tax regime on certain kind of cash inflows as well as inflows above a certain volume too. If all the emerging nations are going to be forced to adopt such measures, then very fabric of Global Markets and Globalization as process will become extinct soon and defeat the objectives of the agreements already signed in this direction. But then, this is a situation as on date, which has a very small but sure probability of  shaping out, given the behavior and turn being witnessed in the fiscal as well as monetary policies of Developed Economies.

In an effort to conclude the write up so as it could be gone through easily the is being turned to Indian Markets. Indian Markets may get saved from the damage that huge amount of Cash Inflows are capable of causing. But till the task is not over, the torchbearers at Indian Economic Infrastructure, may not afford a sound sleep.

As per the expectations and sentiments in Indian Economy at present, launch of a large number of IPOs is being expected and awaited. These IPOs may provide a cushion by working as antidotes against huge cash inflows, that may result due to the reasons of a Huge Interest Rate differential.

Its not all over, and will or may continue for longer time with or without time interval, but at the moment I would love to say—————————————————

Always Yours ————— As Usual ———————-Saurabh Singh

 

 

 

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RBI and Finance Ministry at Cross Heads

Comments Off on RBI and Finance Ministry at Cross HeadsPosted by on December 2, 2009

The RBI is not in favor of the consolidation in banking industry as it feels that right time is still to arrive. They have a valid reason too. In a country, where the process of financial inclusion has not been completed, talking of consolidation does not make a sense. Though they understand that as a country, there exists a problem of having Banks more in numbers, where as there is absence of dominant players in the sector, leaving a few exceptions. But it still hold the view that as a factor, financial inclusion has much weight as compared to bank consolidation.

On the other hand finance ministry has asked the top five public sector banks to come up with the ideas on banking consolidation by the end of current fiscal. They have further been told to submit a detailed roadmap and also do the due diligence of the small banks they could acquire. The finance ministry is of the opinion that there should be 8 to 10 large public sector banks as compared against 27 at present. They have point, as their problem is of governance, overstaffing, fat organizational structure and thus more expenses to be meat from Government Budget. Thus ROI that the Government is generating can not be called satisfactory. Certainly they want to be in the banking sector, but the only point that it wants to make is; that the Government needs to be represented as dominant player and simultaneously the consolidation will also reduce the burden on Government exchequer while efficiency would be boosted.

I have presented both the point of views, now it’s up to you, that whom you choose to align with. Here, a clear conflict exists, but at the same time, both the points have a valid reasons and arguments to support it.

Good day

Saurabh, India

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