Radhika Pandey and TCA Raghavan have taken the Baton from Ila Patnaik and Ramesh... Nd have done ample justice to this show on Economy..... High praises....
Can we please have an episode to discuss the radically new concept proposed in the book "Money: The zero sum game"? Especially, the book recommends that our banks should give out much more credit, and take more risks for that. But such an approach requires more relevant data, where as our banks have a bad past track record of landing in the NPA mess. So the question is, what kind of data should be available to the banks, and what changes are needed in the regulatory framework to stimulate a fast economic growth, _without_ a risk of landing in yet another NPA mess? Also, how well does the empirical data fit the _Vaidya-Subbu equation?_ How much is the required increase in the banks' credits that would achieve the target economic growth rate?
You need liberalization 2.0 We are at a juncture where NPAs occurs because of regulatory risk rather than business practices. Revenue expectations don’t materialize because regulatory headaches. Power sector is a prime example of this.
My issue with the bail-in clause of the FRDI bill is, that the bank did not ask me before giving loans to risky ventures. So, I should not be penalized with my deposits for the bank's mistakes. I would rather willingly invest in risky bonds and debt funds, because then I am responsible for my decisions. Whereas, bank deposits are meant to be zero risk. In such case, bail-out is better because my own taxes are being returned to me, for guaranteeing zero risk of savings deposit.
Staff accountability and Compliance have been made ridiculously stringent in Indian Banks specially PSU banks that risk appetite and greed has no place there. But as I said it has been made" ridiculously " stringent which is like killing mosquito using sword. Hence PSUs are not lending as well.
A small correction (I think). Startups who banked with SVB didn't take loans from SVB, not because of the pandemic. They were flush with money from investors in a Zero Interest rate environment (high liquidity). Usually, banks take deposits and use that for loans, but SVB didn't have that option and chose to invest in held-to-maturity bonds.
The economic losses on the held-to-maturity bonds are as real as the other bonds, they are simply not recognised by the prevailing bank accounting rules.
We weathered 2008 because the irregular/black money economy was strong. It is not the case anymore and as the Adani case shows, regulators and public owned companies are unprofessional, unsophisticated, and in the pocket of select few businessmen by way of politicians. Despite all the positive hopes being set up around this, we might get hit pretty hard this time around.
Indian banking sector is very very robust as it is controlled by UPSC qualified people who are the most talented people of world . .so india will never face any problem due to these UPSC people .
