Why Cost Free Government Fund Is Deposited In Private Bank

Bank licences

This is with reference to “Licence to bank” (Business Line, April 10) on the issues relating to new bank licences. This is not only the concern of the standing committee but also that of the RBI. It is true that subjective judgments do not necessarily lead to corruption.

But given the history of our corporates and politicians in 2G as well as Coalgate scams, additional prudence has to be exercised.

It is not true that new banks will enhance financial inclusion. We have the history of the new gen private sector banks; none of them handle pension accounts, employment guarantee scheme payments, to name a few.

All government schemes, including study loans, are handled by PSBs, but the Government favours the private sector banks with cost-free deposits. The existing financial system and network are ideal for our economy. It will be business prudence to strengthen the present architecture with adequate manpower and capital rather than opening up the banking sector.

S. Veeraraghavan

Madurai

Sugar decontrol

This refers to the editorial “Sweetening sugar reform” (Business Line, April 6). With inflation having made life miserable for the common man, any likelihood of upward movement of prices of essential commodities can be worrying and should be avoided. The open market prices of sugar are already in the Rs 35-40 a kg range and the freedom to fix prices could aggravate the price situation further.

With subsidy on sugar supply rising, the prospect of the Government hiking PDS prices cannot be ruled out. . Any rise in sugar prices is likely to compound the common man’s problems.

http://www.thehindubusinessline.com/opinion/letters/bank-licences/article4606741.ece

It is worthwhile to mention here that total of cash surplus in public sector undertakings and that in government departments is to the tune of not less than ten lac crores. If 40 % of it i.e. Rs.400000 crores goes to private banks which is parked at zero rate or at savings rate , private banks will gain in profit by thousands of crores of rupees . But who will stop this unhealthy practices and unwise guidelines issued by the government.

Please click on following link to read more

http://jaindanendra.blogspot.in/

Saturday, April 28, 2012

Why not Uniform Interest Rate

The war continues among banks on interest rate. After nationalization of banks in 1969, RBI used to decide rate structure for deposits and for lending uniformly applicable for all banks. But after adoption of reformation policy in the year 1991, RBI freed lending rates excepting loans upto Rs.2.00 lacs. In the name of competition, banks started rate war to attract high profile customers into their fold. Social banking concept and mass banking approach initiated through nationalization of banks have now become the history.

You may read following two articles . Please click on link to read more 

http://danendrajain.blogspot.in/2012/04/why-not-uniform-interest-rate.html

http://danendrajain.blogspot.in/2012/08/uniformity-of-interest-rate-on-bulk.html

http://danendrajain.blogspot.in/2012/08/uncalled-suggestion-for-banks-demanding.html