Earlier in the year, the Indian economy witnessed a slowdown. The central government has taken a number of steps to address this. However, there was no positive improvement. Now the nationwide fighting or stagnation caused by the Corona virus has made the economy even more dwarfed.
The announcement comes as April 10 is set to be the sixth day for the merger of 10 state-owned banks. The banking sector is in a state of bankruptcy today due to the rise of non-performing loans or NPAs and the rise of high-profile industrialists and businesses who have embezzled money from the bank.
The central government is said to have taken the above decision, thinking that merging weak banks with insufficient NPAs with some large banks could improve the economy. But the reality is telling a different story. Bank employees are outraged by the loss of jobs and are protesting the merger.
The finance ministry, on the other hand, has assured that no employees will be employed. If such a decision is made, it has become difficult to understand how the capacity of the large bank to be created can be increased and the profits made. “It simply came to our notice then.
The banking situation will never change if the banks that have been weakened today by the bank employees who have benefited by showing undeserved favors to someone incompetent or landless in the merger process. The finance ministry has not yet commented on the allegations.
While the Indian economy is going through a difficult period, Karona. The pressure is on the bed. Also looking at the recent past, ‘Jesse Bank’s actions are coming to the fore. Depending on the size of the bank’s account holders, it may be difficult for them to get their money’s worth.
In such a situation, the choice to deposit money may be reduced if there are a handful of banks. This means that people do not think that if they keep all the money in one bank and deposit it in different banks, the abnormal situation can be overcome.
Bank merger advocates argue that large state-owned banks can compete with private banks. The ability of large banks to lend increases. But it is safe to say that with the intervention of politicians and bureaucrats in the state-owned bank, people like the silent Modi or Mehul Chosi, who extorted money from the Punjab National Bank (PNBB), could also benefit.
In fact, it would be untrue to say that banks are offering unusual loans due to political interference. There has always been the intervention of politicians or high-ranking officials from the central government’s finance ministry. What is even more deadly is when high-ranking officials, starting with bank branch employees, are plotting to rob their bank. At that time, the general depositor did not have a guardian.
Looking at this backdrop can make it easier for big bank robberies. Because the left-hander doesn’t know what the right hand is doing in a huge organization. Probably small banks can be more secure for depositors.
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On the other hand, the frequent replacements of the head of the Reserve Bank of India (RBI), which manages the banking system in India, and the fact that there are differences within the central bank continue to weaken the morale of the banking sector. Only NPAs of state-owned banks have a net worth of Rs 9.28 lakh crore. In such a case, the banking sector will be in dire straits if the bank merger is not fruitful.
There has been no positive change in the Indian economy since Narendra Modi came to power. The country’s gross domestic product (GDP) was in good shape during the by-elections. The public could feel it too. The Modi government has been hit hard by the financial reforms, but to no avail.
In this context, the plan to form four large banks, including 10 state-owned banks, is awaiting debate. What the government has failed to do with deregulation, the introduction of GST and now the management of covid-19 could be another failure.