From the comments, it’s seen that public sector banks have to bear considerable social responsibility obligations in giving loans to farming and other sectors with the lowest returns, many times not recoverable, which is not there for private banks. On the one hand, public sector banks have to take social responsibility, and on the other hand, they have to go to the public to raise funds. It looks a bit odd.
What are we doing with tax collections? Where are the private banks getting their funds from? There is talk of privatization. Where are they getting the financing? Huge amounts are spent in the name of development under Capital for Highways, Railways, and others, but what is the return on capital? Further FDI and foreign investments are encouraged. What is the gain? These and many others.
The government is all the time spending huge amounts on lakes of chor.
Correct. Banks should be privatized to remove political meddling, and taxpayers should not bear the burden.
Due to the non-recovery of dues, banking could shrink over the years. Or the newer borrowers have to pay for the loss created by older defaulters.
Anyway, it’s going to be a difficult few days ahead.
All said and done, there are sectors of industry that require help by way of cheaper loans for them to pick up again. For example, in the MSME sector, small garages, body repair shops, etc. Even small businesses, roadside shops, and hotels require hand holding.
The pandemic may the government cannot run away from its responsibilities, leaving it to the PSU banks. They are persuaded to assist SMEs and small businesses.
If “REAL” privatization clears the NPA, then the cartels of the elite lose control. India operates crony capitalism that is only available in pieces at dark money prices
Banks may introduce savings deposits linked with equities which may outdo inflation and are liquid than bonds, are safe heaven investments, but to gain from bond one, must hold on longer, but there are shorter-term bonds available too. But, no such limit with stocks.
Sitharaman said at the annual general meeting of the Indian Banks’ Association on Sunday. “As a result, they’re going to ready to go and lift money from markets. I’ve got absolute self-interest in pressing this particular aspect because I might think the burden on the govt. to recapitalize you’ll be far lesser.”
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