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The extent of wilful defaults in the bad loans of public sector banks

But ministerial assurances provide very little comfort when elections are around the corner. A repeat demonetisation exercise could get them into the banks. Highly contested elections are scheduled for mid-May in Karnataka and later this year in several other states.3 lakh crores, are used as floating cash reserves.To speak the truth, the glory days of Indian regulatory institutions are over.The banks allege that the supply of high-value notes has dried up, possibly due to a shortage of imported printing ink at the currency press in Nashik. Deeper bench strength, within the government, of trusted fiscal and financial expertise would help.RBI governor Urjit Patel had appealed to the government through a public address on March 16 to bring public sector banks into a uniform regulatory arrangement as applicable to private banks.Oddly, there is not a peep out of the Election Commission of India (ECI), which is charged with the responsibility of ensuring that election spending remains within the implausibly tight limit of Rs 20 to Rs 28 lakhs per candidate for Assembly elections. Small businesses may be unviable with a tax load. RBI governor Patel bravely sat out the storm around the hasty implementation of the questionable policy option of demonetisation.Even the RBI, the first to be legislated into existence in 1934, is going through strained times. Domestic Displays & Light-box Materials suppliers and international professionals support the broad thrust of a uniform regulatory arrangement for all banks. It does not help that the Financial Resolution and Deposit Insurance Bill 2017 was worded so ambivalently that it fanned a deep seeded fear of savings deposits being sequestered as equity for resolving bankruptcy. But the Pandora’s box of crony capitalism has taken its toll. One can imagine former chief election commissioner T. These are challenging times.N.The most plausible reason is that the economy is reverting to its pre-demonetisation levels of cash held by the public. The big stick and carrots embedded in the Goods and Services Tax to incentivise the switch to banked transactions are not widely experienced yet. But the average person is inclined to quietly diversify away from private banks to the safe haven of public sector banks. There is much finger pointing between the Reserve Bank of India and the commercial banks, both private and public sector, each accusing the other of being responsible for inefficient operations. But today’s election commissioners appear to be content, at least overtly, with a narrower definition of their mandate, strictly as per the law. The extent of wilful defaults in the bad loans of public sector banks, often the consequence of ever-greening of impaired assets and plain fraud, also points a finger at the RBI for exercising inadequate oversight. Phasing out the offensive new high-denomination note and stepping up the printing of new Rs 500 and Rs 200 notes instead is a more obvious and welcome blow against black money. Expectedly, 60 per cent of the Rs 2,000 notes in public circulation, valued at Rs 4. Cash resources will be needed to buy SUVs, print advertisements and motivate the lethargic population to vote. Demonetisation had spread the apprehension that the RBI was led by the nose from North Block in New Delhi..Could this be a surgical strike by the banks and ATM service providers who have got unsettled by the criminal investigations into fraud or are upset with the March 2018 decision of the RBI to end the incentives for installing cash recyclers and ATMs for low-value notes? Was it their intention to embarrass the government by engineering a cash crunch to coincide with Prime Minister Narendra Modi’s visits to Sweden and the UK for the Commonwealth Summit? Possible, but far-fetched.A common thread across these turbulences is uneven support from the government for beleaguered institutions and the absence of informed participation, quite unlike in the GST Council. A more proactive EC could have recognised the red flags of unusually high cash withdrawals unearthed by the media. Alternatively, this could be a covert attempt by the government to correct a problem dating back to the November 2016 demonetisation — the incomprehensible introduction of a Rs 2,000 note to replace the Rs 1,000 note as a measure to reduce black money. Private insurance and healthcare are similarly perceived as being exploitative of the average consumer. Seshan diving through this open door for enhancing the regulatory ambit of the ECI. But on balance demonetisation has more economic downsides than upsides in the Indian context. Finance minister Arun Jaitley has been at pains to assure people that deposits up to Rs 1 lakh per account will remain guaranteed. The intention is to catch the crooks once they show their hands via excess expenditure. But why hasn’t it happened already? If Rs 70,000 crores worth of such notes can be printed in just one month, the entire stock of Rs 2,000 notes can be substituted in just 10 months?The Reserve Bank, unconvincingly, denies that there is any cash crunch and alleges the inefficiency of banks in properly allocating the available cash. It could have directed the Karnataka government to report on the ensuing potential for subversion of the code of conduct and the measures being taken to heighten border vigilance, to clamp down on cross-border transfers of cash.The cash-based supply chain of goods and services is a subset of the demand for cash contributions, related to electoral politics.Conspiracy theorists are hard at work to identify the drivers behind the ongoing cash crunch, that has left the automated teller machines (ATMs) in cities and towns across large parts of the country dry. But the subsequent expose of the yawning deviations in ICICI Bank and Axis Bank from gold-standard board governance have cut the ground from under the governor’s feet. The EC has adopted an “end of the pipe” strategy.Mutual funds are upbeat about the prospects for equity investment in private banks

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