You must Sign In to post a response.
  • Category: Miscellaneous

    Multicrore bank scams, How do we safeguard the taxpayers money?

    We have been expressing our anger and loss of faith in the banking system that is reeling after being hit by one scam after another.

    Nobody knows what else is cooking? how many more are there in the pipeline?

    Instead of just raising threads about X,Y,Z or blaming a party, can we discuss on how to safeguard the tax payer's money. Because so, far in the last 11 years, three of our FMs (Pranab Mukhjeree, Chidambaram, Arun Jaitely) have pumped in Rs: 2,60,000 CRORES of the tax-payers money to bail out the Public sector banks in the last 11 years.(times of India,19th Feb 2018)

    What needs to be done to stop the bleeding of banks by bad loans because, I'm sure the only way out for the Government is to support the ailing banks once more.

    Learned members with finance and banking background can make this discussion meaningful.
  • #626868
    Whatever may be the scam the ultimate sufferer is the taxpayer. He has to pay from his nose. Almost 40 to 50% of the total earnings of a taxpayer is going to the government towards tax only. Such money is being looted by these selfish people with the hand in glove attitude of the concerned officials and politicians. The kingdoms are being distributed among the thieves. A common man is staring at the happenings without any clue to stop or any say. This system is to be stopped.
    No loans or advances should be given to anyone without a proper collateral security.Now if we take a loan for a house construction the papers regarding the ownership will be with the financing agency till the loan is completely repaid.Similarly, when the bank is giving the loan to an Organisations, the promoters should furnish their own assets and their registered documents should be with the bank. Otherwise, the company should take an insurance equal to the loan amount and those policies should be endorsed to the bank. Some system like this is to be brought in to a have a better control. Any corrupt officer should be removed from the service and should not have any right to approach court even. CBI should be made above all politicians and they should be reporting to CJ of India. If these systems common there may be some improvement.

    always confident

  • #626886
    Tax payers' money is frittered in many ways. No just by bank losses. But somehow bank losses make sensational and shocking news because we deal with them daily and our expectations are quite different from other organisations. We see bank as most responsible and accountable organisation and repose maximum trust on it. This still holds good in comparison to many other organisations and services we are dealing with in our daily life.

    Very recently a well known mobile service provider closed shop. Tens of Thousands of customers lost their money or met with a hell lot of inconvenience. I am one who lost some money as residual balance kept with them as prepaid balance. However we do not show our anger and exasperation against them. We simply murmur and absorb the loss.
    There are many companies making losses or wasting shareholders and clients money. They compensate this again by loading the loss on the price of the product or service.Or they simply default with the banks. There is no external control on them to limit their profits. Even when a private company fals, the banks get hit.

    But unlike these, banks(especially the public sector banks) are under many constraints. They are not fully privatised nor allowed to be fully profit oriented. Their activities are restricted. They are not allowed to charge their services as they wish. They are to follow government guidelines in implementing various government schemes. As their network is very good, government uses this network to implement many financial and non-financial schemes and bring economic development in the country.

    So nationalised banks face two main handicaps:

    1. They cannot price their services and products as they wish , nor maximise profit as they wish. They cannot function as they wish with a motive to boost profit. At the same time they are supposed to make profit also.They cannot expand their operation and business as they wish .
    2. The government is the majority (or almost ) owner. When other companies offset their losses from their accumulated high profits, or reduce dividends to shareholders or raise further capital as rights or preference shares, nationalised cannot do any of these.

    The latest mobile service providers who give very low priced services are not at all making profit now. But they have many methods to carry over the losses or absorb or adjust them by certain gimmicks. Nationalised banks are not allowed to do so.

    When nationalised banks make losses tax payer is not at all affected directly(unless his deposit money is withheld or moratorium proclaimed). But when a private company makes losses, its products and services price is hiked and taxpayer pays it affecting him directly, but without knowing that.

    Nationalised banks have a right to get compensation for the various services it renders to the government by doing a lot of voluminous work which involve human effort and time , but do not add to banks profit.
    We still need public sector banks for social and economic development. Their role i these is very significant.
    However the government and public have to see them not as fully commercial entities.

    If they are to be sen and expected to make huge profits, then they should be allowed to function as fully commercial business. When even the oil companies are given freedom to decide their product and price, why not nationalised banks be allowed their full freedom, if they are to make profit as commercial enterprises?

    (But none of these should justify if the banks neglect safety and security norms and allow frauds to happen from their employees).
    The best way for people is "not to keep all eggs in one basket". Private entities also can fail and they fail also.

  • #626888
    When will the scams end?
    Who can control the system?
    No technology available to check the money drain?
    I think, it will end till entire money is wiped out from the financial system.

  • Sign In to post your comments