Reserve Bank – outsource thyself

Mortgaging the country doesn’t mean squandering her wealth in overt and covert ways alone. Behind the facade of Modi-Rahul engagements and the sound bites accompanying these, there are different forces in action to silently siphon off the country’s wealth.

So the modus operandi is like this. Create as much din as possible to keep the media occupied and focussed on the din. For that create newer controversies invloving the popular folks so that the nation would be hooked to the media following these. And when the nation is not looking, make policy decisions in the back room and silently hand over the country to the vultures. This has been repeatedly happening for some time now.

Look at the following:

The whole of the country follows the Modi – Rahul spat. The English electronic media goes behind its normal business – going after rape incidents and similar such events and makes the people look in that direction. And the ‘National’ English media debates on whose catch phrase is better – Modis’ or Rahuls’ and also contains ‘erudite’ articles by left oriented leaders pontificating on the New Fatherland (China).

And the RBI makes an announcement of foreign banks in its order :

1. Issues directive to foreign banks in India to open zero balance accounts for retail customers under the guise of making banking accessible to rural folks.

2. Asks those foreign banks not to insist on minimum balances ( currently they are in the range of Rs 25,000 daily average )

So far so good. Having put up the appearance of being ‘stringent’ on foreign banks, they make the not-so-publicized announcements :

1. The global banks can open local head quartered subsidiaries.

“So what ?”, one might ask. But these “local” foreign banks, once established, can take over other local banks. And the RBI says this in a specific clause. This is reported in The Wall Street Journal Asia of 28-October-2013.

And the paper says that RBI has given the idea that the foreign banks could convert their existing Indian branches into local banks and over a period of time would be allowed to take over other Indian banks.

The RBI further has assured “near national treatment” to all these foreign banks.

So, in the near future, you could be seeing Barclays Bank in Usilampatti offering Crop Loans to dhothi-only clad farmers. And mind this – the loan officers would be the ultra modern girls operating out of air-conditioned branches.

And what if the farmer doesn’t pay his loan on time due to ,say a drought ? Send in anti-socials for debt collection ?

Better disband the RBI and outsource that function to the MAS ( Monetary Authority of Singapore ).

These guys are so watchful that they initiated audit of the loans that the Indian banks in Singapore provided to businesses when it was reported that the banks were slightly over leveraged in terms of the loans provided to some Indian companies about whom some adverse press reports had emerged. Such is the attention to detail that is used by MAS.

Another case in point is that the MAS does not allow expansion of foreign bank branches and ATMs like how it allows the country’s own banks DBS and OCBC. There is a strict cap on the number of branches that can be opened.

Either RBI learns its lessons or take help from MAS.

And the national media NDTV and CNN-IBN focus on Tendulkar’s retirement and Shilpa Shetty’s pregnancy while The Hindu speaks about the “rise of communalism” in the BJP ruled states.

Banking banking no papa ..

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 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.