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I am worried.

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What is given below makes sense. It causes worry. I am worried. Are we getting into a Financial Maze? Please read and discuss.

Random Reflections – 2
Payment Banks –
Digital Banking and Privatisation
D T Franco Rajendra Dev
President, All India State Bank Officers Federation
Date: February 15, 2017
The advertisements of Airtel Payment Bank showing crowded branches, indifferent staff and different interest rates have been prepared to show public sector banks in poor light and an abuse on the employees of Public Sector Banks. It says why the Banks have to be like this? The ethics to be followed in advertisement is completely given a go by. Chalo School automated” has sent me an email asking to use pay U money for online payment using credit / debit cards, wallet and net banking as easy as movie ticket booking. It says, “Chalo-lets move to cashless mode to build Digital India Another email from paytm says Review & Get 200, Refer & Earn extra 100. Yet another email received from Funds India says “Save in Super Savings Account and earn 8.65% growth”. At the bottom of the one page advertisement which lures with “Free ATM Card” says the Super Savings Account invests in Reliance Money Manager Fund” and adds “subject to market risk”. The fourth email of today from Fullerton India says, “Fulfil your dreams with special offers from Fullerton India Personal Loans – Interest rate starts from 11.99%. Check Eligibility – Apply online”. I remember reading “Banking’ means the accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise”. Are these companies mentioned above who send emails to us and numerous similar companies not doing “Banking”? How this is happening without a Banking Licence? The government has liberalised everything to encourage the private sector. Who will supervise? How the customers will be safe guarded? Every year so many NBFCs are blacklisted. Still the Government does not bother unless huge scams like Saradha Scam surface. The report of Boston Consultancy Group & Google “Digital Banking 2020” says telecom players like Airtel, Reliance, Vadafone and Tech centric payment players like paytm who are given payment Bank licence cannot earn lending revenues and hence digital banking and cashless Economy have to be pursued. In a country where 26% are illiterate, 8.43 Cr children do not attend schools in the school going age and only 10% can read and write English, this digital modes are going to further marginalise the marginalised. 10% of the population is 12.7 crores. These are the once who are Banking with us but now getting lured by the agencies. This will affect the public sector Banks badly. Once the profit gets decreasing the banks will be blamed for poor performance and high NPA and they will be privatised. This has already happened in other countries. As trade Unions are strong here the Governments are finding alternate ways to privatise. This can lead to dotcom like scams. This can lead to looting of common man’s money. This can also lead to failure of the Banking system. We had only one East India Company which could make us poor slaves and needed 200 years of struggle to send them back. Now hundreds of MNCs, Consultants and Indian Corporates together looting us. So time has come for the common man and the Bankers have to come together. Understand the long-term goal of the Government and the private corporates. Save the common man. You will save yourself.
 
Until Mrs Indira gandhi nationalised banks , banking has always been in private sector.

Though nationalisation made available huge money for govt welfare programs , it brought along with it inefficiency and banking unions . Over the years, efficient banking

institutions were turned into hunting ground for all to collect money and slowly turn them sick with huge NPAs.There is a strong case for de nationalisation.

We have a belief that anything private is bad as we have been fed with socialist rhetorics for more than half century..

We can further off load shares of public sector banks at least upto 49% with listing in stock exchanges Public sector.Banks are being merged to get economies of scale.

A decent banking regulator can be there to oversee them.

Entry of airtel and other payment banks gives an alternative to people putting up with bad service of public sector banks. How badly demonetisation was handled by

banks is known to all. I am all for opening up of many players to banking sector.Every system has drawbacks. If one tries for efficiency and good service, one pays a

price in case there is a rogue player not observing the rules.
 
I have seen lots of Private Banks...They lure you initially with attractive offers...But it is just a chimera...Their ultimate aim is to loot the customers..Public sector Banks like SBI are reliable and safe..I do not trust Private sector banks like ICICI or Axis Bank
 
I have seen lots of Private Banks...They lure you initially with attractive offers...But it is just a chimera...Their ultimate aim is to loot the customers..Public sector Banks like SBI are reliable and safe..I do not trust Private sector banks like ICICI or Axis Bank
hi

these are looklike NBFCs....fly by night....in USA..all private banks are under FDIC approved....i never trust any private bank in india...
 
In a country where 26% are illiterate, 8.43 Cr children do not attend schools in the school going age and only 10% can read and write English, this digital modes are going to further marginalise the marginalised.
This was, among other things, highlighted by me earlier in the demotetization thread.

Those in metros think that e-banking and e-payment would be the panacea while conveniently ignoring the basic fact that most of India lack the requisite knowledge bank in its rural setup.

Regarding paytm:

Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI). These banks can accept a restricted deposit which is currently limited to INR 1 lakh per customer and may be increased further. These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. Payments banks can issue services like ATM cards, debit cards, online banking and mobile banking. Airtel has launched India's first live payments bank. Paytm is the second such service to be launched in the country. India Post Payments Bank is the third entity to receive payments bank permit after Bharti Airtel and Paytm

https://en.wikipedia.org/wiki/Paytm

Regarding Funds India:

FundsIndia (est. 2009) is an online investment website headquartered in Chennai, Tamil Nadu.[SUP][6][/SUP][SUP][7][/SUP] The website is owned by Wealth India Financial Services Pvt. Ltd.[SUP][1][/SUP] It was initially created just for mutual funds but later introduced other investment products like stocks, corporate fixed deposits, bonds, and more.[SUP][8][/SUP] FundsIndia was founded by C.R. Chandrasekar and Srikanth Meenakshi,[SUP][2][/SUP] alumnus of the University of Hyderabad.[SUP][9][/SUP]

https://en.wikipedia.org/wiki/FundsIndia

Regarding Fullerton:
Fullerton Securities and Wealth Advisors Limited is a company headquartered in Gurgaon, India. It offers financial planning and wealth management products to mass affluent and affluent customer segments.

https://en.wikipedia.org/wiki/Fullerton_Securities

Finally, a note on NBFCs:

NBFCs are doing functions similar to banks. What is difference between banks & NBFCs? NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
i. NBFC cannot accept demand deposits;
ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
iii. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

https://www.rbi.org.in/Scripts/FAQView.aspx?Id=92
 
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