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  • Category: Miscellaneous

    Why Government is infusing people's money into public sector banks?

    Today Government has declared that it will recapitalise the PSU banks with an amount of Rs. 2.11 lakh crores over a period of two years. On the other hand, these banks are sanctioning loans to the industries at their own will and they are not able to recover the loans properly. These loans are getting converted into Non Performing Assets (NPAs), the future of which we don't know. Why do PSBs require recapitalisation of money from the Government regularly whereas private banks are able to raise their capital on their own and are showing growth much better than the PSBs. Why Government is infusing people's hard earned tax money into these Public Sector Banks?
  • #612779
    There is another thread today on NPAs of banks and how a common man is getting affected. This thread is also almost on the same lines. All these misdeeds are really due to the unethical nature of these senior bank officials. If a common man or a small entrepreneur goes to a bank for a few lakhs of rupees, the hardships he has to face, the ragging he has to face and the time they take to sanction are endless. Even after doing all these and fulfilling all the requirements of the bank also, only 50% of the amount only will be sanctioned, But the Malays can get crises of rupees as loan-with a single phone call. All big officers of the Bank will be in a queue at the office of the big man. Finally he will flew away to England and spend the happy life. Ultimately the common has to pay from his nose various types of taxes to compensate these losses.
    always confident

  • #612798
    The author must note that the banks are ready made tools to the government as they have to implement the big schemes that are going to be announced now and then. During the Congress government regime the Minister Janaradhan Poojary has organized so many loan melas through the public sector banks and for which the money was never paid back. Over the years the banks have been accumulating loses and the collection of debts were negligible and in many cases the loans were waived off. So almost all the banks have become pauper and cannot continue. Thanks to the demonetization, many banks could bounce back with money, but again they have been withdrawn phase wise. That is the reason being so government want to infuse new life to the banks with fresh investments so that new schemes of housing loan to the middle class can be implemented with glitch or the delay.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #612801
    This is a step under consideration of the Government since GDP came down to 5.7%. By infusing money into the banking system, loans will be given to industries so that employment and spending by the people will increase. This is a step followed when GDP goes down. Some experts say it is good while some others differ. Let us hope there will be an improvement for the sake of the country.
    " Be Good and Do Good "

  • #612802
    I think this is more to cover the NPA than development/loans. I'm getting dizzy looking at the figures. Out of the 2,11,00,000 Crores infusion, how much will be used to clean their books(NPAs) and how much of loans and business is anybody's guess until we have more details.

    Excluding the above, Under the Indradhanush roadmap(2015), the government has to give around 25,000 crores every year (2015-2019) to PSU banks. Apart from this 10,000 crores has already been promised to be infused in 20-17-18 and 2018-19.

    In short looks like there is more to come and since the government call its own bank's NPA as part of a 'Scam', we all have to pay for the greed of a few well-heeled people. Even though the banks have so-called recovery tools, it would be a long drawn process by the time each culprit is booked and money retrieved.Apart from the loan amount, who's paying the interest on these bad loans.

    I feel sorry for the common man, the people who have bought shares in many public and private sector bank and the mid- low-level workforce. Looks like God has a lot of people to save.

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