Monday, October 9, 2017

Catastrophe of bank interest rates – 24

Continues from the previous post –

In addition, that is precisely what happened. As of March 31, 2016, the bad loans of public sector banks reached 9.32% of their total loans. A year back, they were at 5.43% of their total loans. That is a huge jump in just one year. We should put all bad loans in categories as given above. If that done we shall know the exact nature of causes for that. Banks do not have any powers to interfere in working of their borrowers. This makes the bank helpless in such situations. Technically speaking most banks in world is on the verge of bankruptcy. This is because of reduced interest rates on both sides.
The only solution to this is that we rise against this conspiracy of gambler group and its crony economists. Most depositors are not aware of this conspiracy and they continue to believe their political leaders. The attempt to prepare this essay is to educate them about their rights as depositors. After long research it has become clear that best co-relation between interest rates on deposits and loans is that deposits should earn at least 12% per annum for period of 3 years and loans can be charged 15 to 30 % interest on them. This depends upon what is the cause for borrowing in first category, "Real economic group".

This article ends here; in my next post, we shall see intelligent vote bank strategy of Bharatiya Janata Party.
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Monday, October 2, 2017

Catastrophe of bank interest rates – 23

Continues from the previous post -
Government often treats funds by public in these safe deposit and recurring deposit as it is property of that bank. This behavior is unjust to all depositors as their funds are exploited for uses to what their prior permission is not taken, this amount to cheating and theft by government. Banks are forced to do many charitable activities by government; all these must stop. When bank takes money for safe deposit or recurring deposits banks do not take such permission and so this is breach of trust by both bank as well as government. Depositors must be treated as sleeping partners in the business of banking and given due rights in the business.
From available records from years, 2011 to 2012 and 2015 to 2016, the share of deposits in the household financial savings has come down. Nevertheless, it remains a major part of how people save. If interest rates on deposits come down, people need to save more to meet their savings goal. This means lesser consumption, market suffers, which has an impact on economic growth. There is also a possibility of not saving enough and not meeting their savings goal, which again is not a good thing. This could mean not having an adequate amount of money for the education of children, among other things. On one side, costs are rising and income reduced makes it impossible for middle class to put more money in FDs and RDs. Reducing bank deposits makes the bank short of funds for business. The complete circle of financial moment suffers. As a result, often depression and inflation effect we experience. When we had in the past, proper balance in bank deposit interest rates and loan interest rates we never had depression or inflations in India, this fact we must not forget to note. Only after suicidal reduction in interest rates, were introduced; and we were forced to put our money in stock exchange where gamblers have free field ordinary investors began to feel the pinch. To work in these markets one has to be well versed in that market. It is a full time business to be successful in those markets. This is not possible for ordinary people who have savings accounts.
Bad loans owned by the government would sharply increase. As most experts predict. However, this is not a new thing since most loans of government are bad loans because government has a tool of taxation to manage them by additional taxes.

Continues in the next post –
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Saturday, September 23, 2017

Catastrophe of bank interest rates – 22

Continues from the previous post -
Due to large population of India and limited resources as being a poor country, the government cannot be expected to take on such a large responsibility. In such an eventuality, we should expect that our government allow its citizens to fend for them selves by higher rates on deposits they put in banks. Here we see that our government is not mindful of this situation and keeps on copying developed countries with social security facility by reducing interest rates on bank deposits of citizens. This amounts to double compression of citizens and makes living impossible particularly old and senior citizens with no other source of income. Bank deposits is so far the most popular investment mode public believes and it is not wrong, as banks are easily accessible to everyone as most have their savings accounts in banks. Government with support of most gambler groups forces funds of public to other ways such as mutual funds, shares, debentures but working of these is not within the understanding power of public they are not popular. Government has no right to do such an undemocratic stance.
The first paragraph of this charter states as given above. "Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality". To get these achieved without social security provision we need an alternative arrangement and the only feasible arrangement possible is higher rates on deposits.
Continues in the next post –
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Monday, September 11, 2017

Catastrophe of bank interest rates – 21

Continues from the previous post -
Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.
In simple terms, the signatories agree that society in which a person lives should help him to develop and to make the most of all the advantages (culture, work, social welfare) which are offered to him in the country.
Social security may also refer to the action programs of government intended to promote the welfare of the population through assistance measures guaranteeing access to sufficient resources for food and shelter and to promote health and well-being for the population at large and potentially vulnerable segments such as children, the elderly, the sick and the unemployed. Services providing social security are often called social services. Unfortunately, we do not have such a well-balanced arrangement we have opted for reservation and subsidies based on caste. This wrong arrangement costs government many expenses. We should change over to this more appropriate arrangement of social security in place of reservations and subsidies. However, we do not see any desire on the part of our government to do that. At present, we notice that this wrong arrangement BJP government uses to develop vote bank amongst the beneficiaries by favoring some castes with additional subsidies and reservations. This has already spoilt the moral of our society and people have become more irresponsible since they get something for which they have no responsibility.
India is not a signatory to this charter so; we do not have any social security protection. Where such protection is available they may afford lower interest rates on bank deposits but where that is not available lower bank interests on bank deposits is not justified, since it is very difficult to manage with.
Continues in the next post –
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Wednesday, August 30, 2017

Catastrophe of bank interest rates – 20

Continues from the previous post -


Moreover, who control banks? Some big businesses and they want to use your money for their business at very low saving bank interest rates. They have all the money of all the account holders to do their business activities. Saving bank account interest rates are the lowest. Therefore, you should know what business interest remains in such policies. These policies have nothing to do with any economic revolution as he and his team claim. Modi wants these bank owners to use public money for, free and then donate large sums of money to the political parties. All political parties have certain rules and by them, they are giving commission to those members who deposits funds for that party. The raters could be as high as 25% of the donations. This is a big business of many political activists.

Modi declares that our money is safe in banks. How he can say this? Several banks have been duped by their directors and bureaucrats right under nose of RBI. How many account holders got their deposits back on closer of the bank? Large number of account holders has been ruined by that. RBI is supposed to look after the interest of these account holders but it does not do anything to protect them. RBI appears to be the most irresponsible bank on that account. Unless there is a law such that, RBI must return all deposits of all account holders with due interests accruing from that, incase of such mishap; we cannot accept that our money is safe in any bank that is working with RBI license to do banking business.

Is Modi government ready to enact such a law? So long as such law does not exist, we cannot say our money in banks is safe. Modi has a habit of taking too many things for granted. This is not acceptable to people for obvious reasons. There is a meager provision of some return up to the amount of one hundred thousand rupees in such eventuality but that is not enough. Should we say our government has been trying to fool us?

Let us see what social security practice in other countries is. This concept originated by Church in America for the benefit of Christians. Later on, it was accepted by many countries as given here below:

Social security is a concept enshrined in Article 22 of the Universal Declaration of Human Rights UN, which states:


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Friday, August 11, 2017

Catastrophe of bank interest rates – 19

Continues from the previous post -
In our country, in affluent societies, people are using these facilities since long; it is not a new thing. Prior to facility of on line people were using a cheque book and were paying by cheque. For sizable sums, it is most convenient to pay for purchases. However, Modi wants this method to be used for all types of transaction. That is foolish. Because every time you use it you pay commission to bank and that way, your purchase becomes that much more costly. Poor Indian cannot accept that. Therefore, we see there is growing resistance to this. Here we ask government why government insists that we do not withdraw cash from our accounts. It is my money I should be able to withdraw it as and when I want. Government has no reply to this. Existing law does not allow government to make people forcibly accept cashless transaction. Cashless method leave large sum of money with banks. This makes it like a fix deposit and by that, the bank can give large loans to the owner of that bank. Banks owned by government also benefit by this. This could be one possible reason after this insistence for cashless. This may be one reason why our government has put limit to withdrawals.
The hidden reason for not allowing people to have cash in their hands is horrible. Cash in my hand is my freedom. Modi government wants to curb your freedom. If you are free, you are likely to oppose his government and its nefarious undemocratic activities. He has power to curb your accounts and stop you from opposing his government when all your money is in banks. He can order to stop your account and by that kill your all movements. Our government has done it with one international NGO who had asked questions to it on certain deals in mining rights. Nevertheless, some cashless deals are taking place such as those with cheque. For large amounts, cheque has been the way since long. Modern technology has offered more facilities such as debit card, credit card etc. in spite of them right to keep his money of any value cannot be banned by any government if it poses as a democratic government. Modi administration has no acceptable reply to justify their demand that people will not have their money in their hand. All efforts to control value that a citizen may want to keep in his possession are indication that this government wants to curb freedom of Indian people. Unless RBI guarantees payment of all funds, incase of bank closer, this government has no right to curb our desire to hold our money to ourselves. Let Modi government bring in this provision and then if it says that citizens need not keep their money to themselves may be appreciated.

Continues in the next post –
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Tuesday, August 1, 2017

Catastrophe of bank interest rates – 18

Continues from the previous post -

People who want to justify low interest on loans and commensurate low interest on deposit come with an argument that more production creates more employment. In modern technical world, more products need not increase employment. We see more and more automation in industries and that kills any additional employment. The only activity that surely increases employment is farming activity. They are being looked after by special banks and their working does not need any deposits from ordinary citizens. NABARD is an autonomous body specially created to support farmers. However, if there is more sell then more employment it develops to manage those sells. Moreover, when sells are brisk additional interest they can manage without any difficulty. The problem of interest is highlighted by those borrowers who do not want to pay loans and those defaulters from gambler category. All efforts are made to keep interest rate down for their benefits. Honest industries generally do not raise this issue.
How cashless concept was introduced in America by banks we should see to understand this topic. Does economy benefit by introducing this concept in public? Answer is, not at all. Whether public withdraws money by so-called cashless or by cash does not make any difference for economic development. The origin of this modern method lies in the phenomenon of reduced interest rates on bank loans. When bank lending rates were continuously reduced during and after WW2, due to increasing influence of gamble group banks were frantically in search of some additional income to survive. During that time, INTERNET was developing and telephone system was already developed enough, the idea of credit and debit cards was visualized. This concept was immediately accepted by affluent society as they were spending large sums of money every time they made purchases. To carry that kind of currency was not proper and so this idea of carrying a small credit or debit card was found to be most convenient. Prior to that, they used to carry bank chequebook and would put the value and do the purchase. In that situation, there was chance that the cheque may not realize. To safeguard from cheating by purchaser shoppers would arrange delivery after realization of the cheque. This was often inconvenient and insulting to many buyers who were rich enough; therefore, they preferred this innovation as most reliable for both shopper as well as buyer. Banks would charge a small commission on every transaction. That was additional income to them. The more use of credit cards the more income and in this way, these innovations became popular. This was acceptable for affluent society such as in USA and Europe.

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