Monday, 15 May 2017

Random thoughts 14052017

#BitterPill ATM s are to ease the operations for the convenience of the people who keep deposits of their hard earned money with the bank's at rock bottom interest. They are categorized as public convenience and in the modern world they are required in a civilized society just as much as we need public toilets. The ATMs also help the public to plan their withdrawals and do away with the need to carry a large amount of cash in their pocket or hoard at their homes. Further the ATMs also manage to do away with long queues at the Bank branches for withdrawal ( and deposit) of cash and also informs the account holder a summary of the balance in the account. Therefore the ATM can not be treated any more as a value added service; rather it is now a part of the basic services provided by the banks.

So it is very surprising to find banks trying to regulate the usage of ATMs by levy of charges and deciding on ad hoc ceiling for its use by depositors. The recent developments in the banking sector gives a strong reason to believe that this is just another convenient ploy to shore up the bottom lines to hide the inefficiencies of the system and subsidise the bad management of assets and liabilities by the banks. And if this is not enough, banks have all of a sudden stepped up on their efforts to make a killing from all kinds of services they provide. The dichotomy of the situation is such that on one hand the banks are trying to take banking to the old elitist way of transacting business where all transactions have to be paid for not as a service received but as an obligation and on the other, the government is pushing hard for universal banking and digital economy. It is not clear what the actual aim of the whole exercise is , in totality.

Banks owned by the Government of India can not hide behind the brazen assertion of - all services need to be paid- like the private banks . Because they get a large amount of government funds as deposits without making any efforts for it . Further as they are owned by the GOI , their losses are accounted for by the government funds which is nothing but the tax payer's money. And the government ownership also means that it is people's ownership. So their contention about being a fully independent mercantile firm like entity is a false notion which is being used to hoodwink the public. The PSU banks are very much organs of the government and they cannot deny their commitment to the public at large. If their is any doubt about this then that should be cleared first.

And actually that is what is being attempted . There is a concerted move to bleed these banks , make them anemic and then make a great hue and cry before handing them over to private management at a throw away price. But before that it is also necessary to show people that as far as charges are concerned, there is not much difference between the public or private sector banks. It is a gradual step towards preparing the public , the corollary to which will be a massive privatization of banks. And mark my words, this has to happen before 2019. Like the ill executed demonetization, this move will also be clothed with some great objectives and named like - " New economy" , " Second Liberalization" , " Economic Freedom" etc. Of course there are plenty of spin doctors waiting in the wings along with the numerous media channels to hail such moves.

Presently our country is passing through a phase of reckless self gratification by the masses whose levels of aspiration is now sky high. The generations which have been raised post 1990 are the beneficiaries of the material gains from the liberalization of economy and digital age. They can not relate to age old theories, rhetoric, sacrifices, mindset, worldview and education of socialism and class conflict. Moreover the commercialism and commodification of everything including even ideas, values and icons have changed the way of the people's outlook and views. So the people at large may not realize, as they don't do about many other things , that the one sector that this government has screwed right and proper during its three years tenure till now is the Banking sector. And very soon we will witness many other developments. Just wait for the drama of absurd to unfold.

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