In the earlier part of the year, India’s economy suffered a slowdown. This was addressed by the central government. But, there was not a positive change. Now, the Corona virus has caused the economy to shrink further.
As April 10 marks the sixth anniversary of the merger between 10 state-owned bank, the announcement was made. Today’s bankruptcy is due to the emergence of non-performing loan or NPAs, and the rise high-profile businessmen and industrialists that have stolen money from the banks.
According to some reports, the central government took the above decision because it believed that merging insufficient NPAs banks with large banks could boost the economy. However, the truth is that it is not so. Bank workers are furious at the loss of jobs, and are protesting this merger.
However, the finance ministry assured that no employees would be employed. This decision will make it difficult to understand how the bank can grow in size and profit. “It just happened to us then.
The bank situation will not change if banks are weakened by bank employees who have received undeserved favors from incompetent or poor people during the merger process. The allegations are not being addressed by the finance ministry.
Karona. The pressure is on the bed. The actions of “Jesse Bank” are also being highlighted, especially when you look at the past. It could be difficult for bank account holders depending on their size to get their money’s value.
This situation may make it less attractive to deposit money in a small number of banks. This is because people don’t think that if all their money is in one bank and they deposit it in multiple banks, then the situation will be normal.
Advocates of bank mergers believe that large state-owned banks are able to compete with private ones. The ability of large banks lend is increasing. However, it is certain that the intervention by politicians and bureaucrats at the state-owned bank could allow people like Mehul Chosi or Modi (who extorted funds from the Punjab National Bank PNBB), to also benefit.
It is not true to say that banks offer unusual loans as a result of political interference. It has been a tradition that politicians and high-ranking officials in the central government’s finance ministry intervene. It is more deadly when high-ranking bank employees plot to rob their bank. The guardian of the general depositor was not available at that time.
It can be easier to commit bank robberies when you look at the backdrop. Because the left-hander has no idea what the right-hand is doing in large organizations. Smaller banks may be safer for depositors.
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The constant replacement of the Head of the Reserve Bank of India(RBI), who oversees India’s banking system, as well as the fact that there are internal differences within the central banks continue to erode the bank sector’s morale. Only state-owned banks with NPAs have a net worth above Rs 9.28 million crore. The bank sector will be in severe straits in such an instance if the merger does not succeed.
Since NarendraModi was elected to power, the Indian economy has not seen any improvement. During the byelections, the country’s gross national product (GDP), was in good health. It was evident to the public. Modi government was hard hit by financial reforms. But it is not over.
This is why the debate over the proposal to create four large banks that include 10 state-owned ones, is ongoing. Another failure of the government is the introduction of GST and the management of COvid-19.