It is absolutely wrong and self deceptive to say and believe
that chit funds are growing only because there is absence of other financial
systems like banks. Bitter truth is that Chit funds are in operation in all
metros, all big towns and cities and in all villages and panchayats. There are
hundreds of chit fund companies which are freely working in Kolkata and Mumbai
where branches of a nationalized bank are available in plenty and in almost all
roads, all streets and all mohallas.
It is only due to greed for quick growth of money that a
person keeps his or her hard earned money in Chit funds.
Secondly there is no control of the government or RBI or
Ministry of Finance or SEBI to monitor their activities and to ensure that
money of investors is safe in the hands of promoters of chit funds.
Thirdly there are lacs of such chit fund or non banking companies
working as chit funds but not having any permission from government. Chit funds
keep the name of their company as if they are dealing in real estate, or any
consumer product or in jewel to mislead the investors. None of the departments
are aware of what is happening in their area and what precaution they have to
take to safeguard public money.
Fourth, majority of chit funds are getting patronage by
leading politicians or reputed film actors or reputed rich business
houses.
It is not wrong to say that public money in unsafe not only
chit funds but also in state run banks or private banks. Banks are unsafe due
to political exploitation and rampant corruption at all level of banks and the
most astonishing is that most of corrupt bankers have blessings of some key
politician in the country.
Flattery or bribe based promotion and posting, bribe based recruitment,
bribe based lending and bribe based mobilization of deposits etc have all
killed the uprooted all safety valves built in the past.
CVC and CBI or Anti
corruption bureau are not getting time and do not have will to stop unhealthy growth
of chit fund companies or increasing trend in bad debts and frauds in banks. Banks
are unsafe due to rising bad assets and rising number of frauds taking place in
banks.
It is only the common men who are always victim
of lack of control and monitoring .All top ranked leaders in the country are cheating,
not only banks but all departments.
Indian judiciary is unable to dispose off cases even in one
or two decades which are filed by aggrieved person. Majority of Media amen are
also puppets in the hands of rich people and powerful leaders.
Then who will
protect the interest of common men.
Person like Arvind kejriwal or Anna Hazare
who come forward voluntarily to expose the evil works of government servants
and politicians are taken to task by person sitting at powerful posts including
police, IT,ED,CVC,CBI and all.
This is why even after lapse of more than 65
years after freedom Indian government has failed to protect the interest of
common men. Government is unable to eradicate the evils of dowry, rape,
corruption and terrorism. Government has failed to keep price rise in control ,
failed to provide even essentials like water, nutritious food, minimum health
care ,electricity ,road and minimum sanitary services to common men.
Only GOD can help India and Indians.
Saradha due to formal financial system's failure: RBI- Business Standard 2nd May 2013
KC Chakrabarty was referring to the recent scam which has defrauded people for several thousand crore rupees
The Reserve Bank of India (RBI) has said chit fund companies which defraud people show the financial system’s failure to bring unbanked population into the formal system.
“The fact that people have to rely on such entities (chit funds) for their saving needs indicates a failure on the part of the formal financial system to reach out to such groups and earn their trust and confidence through a transparent and responsive customer service regime” said K C Chakrabarty, deputy governor, RBI, at an event in Pune yesterday. He was referring to the recent Saradha scam in West Bengal, where a large number have lost several thousand crore rupees.
“The financial sector architecture we aspire for should be one that is most conducive to meeting the objectives of financial inclusion and financial literacy, besides meeting the goals of customer service,” he said.
The Saradha Group had been raising deposits from the public with a promise to double the money invested within a short period. Even as its chairman, Sudipta Sen, was caught, panic among depositors and agents continues. Some have committed suicide and angry masses have ransacked several offices of Saradha across the state.
“The need of the hour is to ensure that our unbanked population gains access to formal sources of finance, their reliance on informal channels and on the shadow banking system subsides and, in the process, consumer exploitation is curbed,” Chakrabarty said.
Yesterday, the government had also said there was a need to regulate chit fund companies. Arvind Mayaram, secretary, department of economic affairs, said government was discussing the matter.
“The fact that people have to rely on such entities (chit funds) for their saving needs indicates a failure on the part of the formal financial system to reach out to such groups and earn their trust and confidence through a transparent and responsive customer service regime” said K C Chakrabarty, deputy governor, RBI, at an event in Pune yesterday. He was referring to the recent Saradha scam in West Bengal, where a large number have lost several thousand crore rupees.
“The financial sector architecture we aspire for should be one that is most conducive to meeting the objectives of financial inclusion and financial literacy, besides meeting the goals of customer service,” he said.
The Saradha Group had been raising deposits from the public with a promise to double the money invested within a short period. Even as its chairman, Sudipta Sen, was caught, panic among depositors and agents continues. Some have committed suicide and angry masses have ransacked several offices of Saradha across the state.
“The need of the hour is to ensure that our unbanked population gains access to formal sources of finance, their reliance on informal channels and on the shadow banking system subsides and, in the process, consumer exploitation is curbed,” Chakrabarty said.
Yesterday, the government had also said there was a need to regulate chit fund companies. Arvind Mayaram, secretary, department of economic affairs, said government was discussing the matter.
For last two decades management of banks have been proudly speaking that they have robust merit oriented promotion processes and they recruit capable and talented persons from campus after thorough scrutiny to keep banks working efficiently , sincerely , honestly and finally keep banks safe. Two decades ago there was seniority based promotion and banks used to recruit persons at their own as per need in scale I and scale. I only. But they during last two decades banks recruited officer directly in higher scale II or scale III to make the bank services attractive . They built robust training system . They have effective Human Resource Development department and planning department to care of their staff and that of their bank assets .
ReplyDeleteDespite all banks are more or less sick of bad assets and facing capital erosion year after year. Cases of fraud are increasing year after year. Cases of restructure are increasing quarter after quarter .Customers of public sector banks are shifting their accounts from public sector banks to private banks despite higher service charges.Investor prefer investing in shares of private banks to share of state run banks. PE ratio of government banks is around 4 whereas that of private banks is more than four times .Profitability of private banks is much higher and ratio of gross Non performing assets is much less in private banks compared to that in government banks.
Why?
Can bank management continue to save their image only by hiding bad assets and by making lesser provisions or by not giving handsome wage hike to their staff or by forcing staff to work late hours and on Sundays and holidays only?
Neither bank management is ready to accept the faulty execution of good policies on HR nor government (birds of same feather ) have time and willingness to stop bank management perpetuating their ill-motivated management.
Why bank borrowers are resourceful and top ranked officers are wealthy but the junior level bank staff or common men who parked their hard money in banks are only suffering ?
How long this bad management will continue and how long government will provide capital infusion?