The multi national banks of the world are burning in rightful indignation. How on earth could this be ever possible ? How come the world in general and India in particular come to this ?
How is this going to help the bourgeois ? lament the most capitalistic of banks . Would not the poorest of the poor be hit ? ask the very same super capitalist banks of the world.
Lobbies are activated. “Intellectuals” are interviewed and they profess the very same rightful indignation at the Indian government’s move.
The point that is bandied is that India’s governing bank the RBI has announced that four new private banks would start functioning in India. And that has set the world’s capitalists on fire.
And what are they worried about ? If new private banks are allowed to function they will not take the banks to the poor. They will cater to the rich. And lo and behold, they will be owned by Industrial houses which would lead to conflict of interest.
That is because the four players who are likely to get banking licences are the Birla Group, the Tatas, the Larsen and Toubro industrial conglomerate and probably the South India based T.V.S.group. Rumours are rife that Bajaj and Reliance would also be accorded licenses. And the mandate is that they need to open more rural branches as one out of two Indians don’t have a bank account.
So what is the harm ? Don’t Indian’s need more banking ? Why are the capitalist New York based banks worried ?
The worry is – these Industrial houses, if they are allowed to open a bank, would manipulate their own credit ratings and lend their own companies less expensive loans. For example, Reliance, known for its ‘scrupulous’ practices, would accord a better credit rating to itself and lend itself a better loan than if it had to borrow from say Bank of America or J.P.Morgan Chase.
It is true that this is a possibility. We know what Reliance is capable of doing.
But how does it worry the JP.Morgans and the others ? Were they not having banking licenses in India earlier ? They had. But they were not interested in serving the rural India. They wanted to target the corporate rich and get away with the cream. Now that these corporates are allowed to have their own banks, this creamy business is lost.
And so they cry. The baby never cries when it is not hungry.