Skip to main content

Is it time for redemption for Indian Banking System

Indian banking system is a sad story. We have one of the largest concentrations of government dominated banks around the world. India has also a rigid and strict regulatory system for banks. Such is the inscrutably of the regulators that they encourage cheap and bulk loans to large corporates but should such big people try to own banks, it is frowned upon. Customer service is an alien concept to Indian banks, public or private. Convenience to the public is least of their worries as the penetration of formal lending is quite less giving them a God like status.

It is no wonder though that a parallel economy exists in India right under the nose of well-heeled bankers and regulators. They act as enablers to this system, fostering an economic activity that forms most of the financial transactions in the country. Indeed, India being a cash-oriented economy is largely due to indifference and lack sided attitude of banks.

People prefer to keep cash at home than banks even though the government owns more than 25 banks. To go to a bank for a transaction is often a nightmarish task which often involves a lot of paper pushing and frustrating delays. The situations at private sector banks are no good either.

Anyone who has had a chance to look at the NPA statements of banks can see how carelessly they have handled public's money. It's like there is no method or logic to the way credit was extended to the chosen ones. Bad loans are surmounting by each passing quarter even though the economy is growing at a steady space.

Thus, Prime Minister Modi's step to demonetize currency notes of 500 and 1000 rupees is a God sent opportunity for the banks to reform. Ideally, it should have been their job to move the country to a cashless society. But instead of them, it is the Prime Minister and the Minister of Finance, who are doing all the pushing. From Jan Dhan Yojna to Demonetization, it is all the will of the leadership being executed by the banks. And they have to do that.

After all, the leadership is pumping in hard earned money of the public (around 25,000 crore rupees this year alone) into banks as equity so that banks can keep up their hobby of distributing bad loans, encouraging borrowers to not pay and flush more people money in the toilet. They have already written off thousand of crores which were owed to them by wilful defaulters.They owe the political leadership that much to follow their plans.

But the queues to change currency notes and deposit money in banks could have been much shorter had the banks done a decent job at their own end. Had they promoted digital technology for payments or made people aware about alternative means, people would not have been carrying so much cash anyway.

The huge surge in deposits is, therefore, an opportune moment for banks. They can be reborn into a lean and mean financial institutions dedicated to all segments of society and not just the super rich. This would do well to diversify their client base and make good business sense too.





Labels:

Comments

Post a Comment

Also read

Why do we crave bookshops when life falls apart? A deep reading of Welcome to the Hyunam-dong Bookshop

This article reflects on Welcome to the Hyunam-dong Bookshop by Hwang Bo-reum, a gentle novel about burnout, healing, and second chances. Through Yeong-ju and her quiet community, the book reminds you that meaning often returns slowly, through books, people, and ordinary days that begin to feel like home again. Why do so many of us secretly dream of walking away from everything? At some point, usually on a crowded weekday morning or during yet another meeting that could have been an email, you wonder if this is all there is. You did what you were told. You studied, worked hard, built a career, stayed responsible. And yet, instead of contentment, there is exhaustion. Welcome to the Hyunam-dong Bookshop begins exactly at this uncomfortable truth. Hwang Bo-reum’s novel does not shout its intentions. It does not promise transformation through grand revelations. Instead, it sits beside you quietly and asks a gentler question. What if the problem is not that you failed, but that you nev...
Post a Comment
Read more

Spill the Tea: Noor and the Silence After Doing Everything right

Noor has done everything she was supposed to do — moved out, built a life, stayed independent. Yet beneath the neat routines and functional success lies a quiet emptiness she cannot name. Part of the Spill the Tea series, this story explores high-functioning loneliness, emotional flatness, and the unsettling fear of living a life that looks complete from the outside. The verandah was brighter than Noor expected. Morning light lay flat across the tiles, showing every faint scuff mark, every water stain from old monsoons. The air smelled of detergent from a neighbour’s washed curtains flapping overhead. On the table, the paneer patties waited in a cardboard bakery box I’d emptied onto a plate. A squeeze bottle of ketchup stood beside it, slightly sticky around the cap. Two cups of tea, steam already thinning. In one corner, a bamboo palm stood in a large terracotta planter. Thin stems. Too many leaves. Trying very hard to look like it belonged indoors. Noor sat down and pulled the chair ...
Post a Comment
Read more

What if You Could undo every regret? An uncomfortable conversation with The Midnight Library

Have you ever replayed your life at night, wondering how things might have turned out differently? The Midnight Library by Matt Haig asks you to sit with that question. Through Nora Seed’s quiet despair and imagined alternatives, the novel explores regret, possibility, depression, and the fragile hope that living at all might be enough. Have you ever wondered if one different choice could have changed everything? You probably have. Most people do. Usually at night. Usually when the world goes quiet and your mind decides to reopen old files you never asked it to keep. The job you did not take. The person you loved too late or too briefly. The version of yourself that felt possible once. You tell yourself that if you had chosen differently, life would feel fuller, cleaner, less heavy. The Midnight Library begins exactly there, in that familiar ache. Not with drama, but with exhaustion. Not with chaos, but with a woman who feels she has quietly failed at everything that mattered. Mat...
Post a Comment
Read more