Shalini Sen Guptha’s article , “Another tool of
resolution” in the Hindu last week highlights the good points of the proposed Deposit Insurance Bill. Nevertheless it is not going
to allay the fears this proposed Bill has created in the minds of the depositors
of the public sector banks.
India is not America or and nor
can it be compared to any other European nation as the author has done .Quoting
how the Lehman Brothers was helped, EU bank recovery Resolution Directive and
their stringent laws to regulate banks is not enough to satisfy middle class
Indian depositors. For them it is the only safe place to keep their hard earned
and saved money. Other nations do not have these many public sector banks
working till today safely under the control of RBI.
Moreover, Increasing number of
senior citizens have entrusted their retirement funds and savings in public
sector banks and depend on the monthly interest from it for their dignified living.
Their growing medical expenses are met out of it without burdening their care
taking families. They are clinging to their deposits as life boats for
emergency situations. Already the senior are undergoing 25% cut in their
interest income due to interest rate cut. Who is going to compensate them? In
America no body put their savings in fixed deposit for monthly income since,
the rate of interest is as low as 2%. They put in their savings in mutual funds
or equity market and they have many
senior friendly subsidised schemes and covered by liberal pension .Even for
middle aged Indian citizens , their deposits getting locked up for more period
than planned will create acute fears since, the memories of demonetisation hardships are still fresh in their minds
This government seems to be very
fond of adventures in the financial sector in the name of structural reforms. To
them they are surgical strikes, but the civil society should have the stamina to
bear the consequences of these strikes. People are yet to recover from the hard
ships they had to endure due to demonetization. The business class is still not
able to recover from the losses they suffered due to the demonetization and now
the consumers, the producers and traders are facing the consequences of clumsily
introduced GST. Now emboldened by the
recent victories in the state elections, this government may proceed enthusiastically with the Deposit
Insurance Bill notwithstanding the stake holder’s fears and pleas and expert’s advice.
After losing the credibility and confidence of the depositors can any bank
function with profitability? Too many
surgical strikes may kill patients however, confident the doctor feels about
his efficiency .
