Banks, merger of banks
Middle classes form the bulk of depositors in the banks. It is these deposits that in turn form the bulk of the working capital that allows banks to operate. This year’s Economic Survey, in fact, rejoices in the double-digit growth in bank deposits. And yet, middle-class depositors have been shortchanged over the years by the dwindling interest rates on their savings bank deposits. “The interest on savings bank accounts, which was 5% in 1977, was brought down to 3.5% in 2003, and now it has come down to 2-2.5%,” says Thomas Franco, former general secretary of the All India Bank Officers Confederation. “If the middle classes were paid their fair share of interest at say 5%, they would have earned near about Rs 1.8 lakh crore more last year.” https://thewire.in/economy/the-banking-sector-reveals-the-middle-classes-arent-really-getting-a-bonanza
This is far more than the Rs 1 lakh crore that the finance minister claims to have “foregone” with the tax rebate she bragged about. Fixed deposits account for nearly 60% of all bank deposits, and as per the Economic Survey, its share in bank deposits is growing. If one takes into account that the interest rates on FDs have nearly halved over the last two decades, the actual earnings foregone by the middle classes are massive. And yet, there seems to be a general acceptance of this as fait accompli.
The real story behind disappearing NPAs
The banks have written off a whopping Rs 16.5 lakh crore in bad loans over the last decade. In fact, Rs 1.69 lakh crore has been written off in 2024 alone! It is the public sector banks (PSBs) that have taken the major share of these write-offs and it is the corporates who account for the major share of these bad loans or NPAs.
the middle classes – the rates tell the same story of disparity. When it comes to loans, one observes that the low interest ones (under 8%) are more accessible to the corporates (17.2%) than the household sector (4.4%). Meanwhile, loans with interest rates above 11% are disproportionately high among the household sector (29.4%) while much lower for the corporate sector (8.8%). So, despite contributing the bulk of the bank’s deposits, the middle classes are deprived of their deposit rates and low-interest loans, apart from the severe understaffing of the banks which also serves to hurt their interests.
So, while a one-time tax bonanza in this year’s Budget becomes an eyewash that suits political interests, the systematic loot of the common person and the middle classes through such raw deals rarely make headlines. After all, who is interested in the detail, when the devils run the show?
by Anirban Bhattacharya and Pranay Raj
07/02/2025
What Kind of Budget Does India's Banking Sector Need https://youtu.be/Dtg8auJvEe0
Thomas Franco Social activist and former Gen Sec of the All India Bank Officers' Confederation Budget 2025: What's at Stake?', Thomas Franco dissects the government’s claims of a banking ‘turnaround,’ as highlighted in the last Economic Survey. Are declining non-performing assets, rising bank profits and increased financial inclusion as promising as they seem?
He also evaluates whether successive budgets have truly delivered on credit support for MSMEs, including MUDRA loans, during financial stress. Finally, Franco outlines what a credit-sensitive budget should prioritise, sharing key recommendations for strengthening the nation’s financial system.
T
Bad Corporate Loans and Their Write-offs Are Draining the Economy https://www.youtube.com/watch?v=x6MAR_F_F24 The Wire In March 2015, the total NPAs were at Rs. 3.23 lakh crore. This increased to Rs. 10.36 lakh crore in March 2018, the highest in the history of the country. In March 2023, NPAs came down to Rs. 5.71 lakh crore. Did the defaulter companies suddenly decide to pay their dues on time? No, it is only because the banks decided to let them go, and wrote off half of their debts. Contrast this with the life of the common man, whose entire family is haunted to recover the loan amount. Is the system working for the people who deposit their hard earned money in the banks? Or the corporates who get hefty loans at throwaway interest rates?
@Srichand47
This globe runs on the axis of "Powerful Vs Powerless" ...Not on the axis of "Dharm Vs Adharm".... Unfortunately.... we citizens lost our track, by keep believing exactly the opposite, for entire life. Become Powerful enough to stop the injustice..just believing in "Justice" won't change the system.
@bindaasmard664 It's been going for decades now. For instance tata group took over Air India (AI) recently which used to be a state (gov) owned airline only after gov write off it's debt. Ironically it was JRD Tata who founded AI and then under Nehru's socialist agenda was forced to hand it over to the gov. Ever since AI got under gov control it's decline began so much so that it had more than 40K crores of unpaid loan on it when vijay mallay fled the country who's kingfisher airline had become defaulter in some 9K crore loan. No gov babu (AI used to be headed by some senior IAS officer) was ever held accountable for debt that piled up in AI books for so many decades. By 2023 the estimated default debt on AI had rose to over 60K crores which tata group made gov to write off it's books before taking over the AI.
RBI reveals top 100 wilful defaulters; 2,664 corporates owe Rs 1.96 lakh crore https://indianexpress.com/article/business/wilful-defaults-rbi-top-100-corporates-rs-1-96-lakh-crore-9738134/ The actual default and other liabilities claimed before the National Company Law Tribunal (NCLT) run into several thousands of crores by these companies.
RBI & Wilful Defaulters : इस लिस्ट ने सबको चौंका दिया! The News Launcher https://www.youtube.com/watch?v=XhDOgoh2RBM
https://elplaw.in/wp-content/uploads/2024/08/RBI-Master-Directions-on-Wilful-Defaulters-A-Comprehensive-Guide.pdf The framework mandates detailed processes for classifying borrowers as wilful defaulters, including the collection and dissemination of information on defaults of INR 25 lakhs and above, quarterly reporting by banks and financial institutions, and potential legal and criminal actions for defaults of INR. 1 crore and above. The concept of wilful default is critical, as it addresses intentional, deliberate, and calculated defaults that undermine the financial system's stability
https://www.youtube.com/watch?v=HJ-fFK-ORQM 40,000 करोड़ का फ्रॉड साहेब तमाशा देखते रहे ! साहेब का कच्चा चिट्ठा खुल गया
DESH NEET The minister first said that not even one bank scam happened in his tenure, after looking at the slip in two seconds, he said that only 70 bank scams happened, which the minister is calling only 70, due to which a total fraud of 40000 crores happened.