Kudos to RBI Governor, Mr Subbarao for Holding Rates for poor

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AllBankingSolutions's Stand Vindicated - Kudos to Mr Subbarao

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Rajesh Goyal

It was a pleasant surprise to read the headlines in today's Economic Times "The Silent Poor Made Subbarao Hold Rates" (Published copy) and "People suffering due to high inflation forces RBI governor D Subbarao to hold Rates (internet version). The readers can read the contents by Clicking Here. It was a pleasure to read the article as time and again the whole media, corporate bosses, top bankers had been critical of the RBI Governor's policy of holding the rates and now comes out the truth.

However, we at AllBankingSolutions.com had time and again supported Dr Subbarao's policy even at the expense of some of my close friends being highly critical of my views. I still remember our article uploaded about 3 months back under the following heading (readers can click the link below to read full article):-

In the Name of Growth All Top Banker and Corporate Heads Want to Crush Poor and Middle Classes by Rajesh Goyal (uploaded on 29/10/2012)

I do not know whether any other media have come so openly at that time in favour of RBI Governor's policy to hold the rates. Rather, he was bashed at various levels for throttling the growth story. I still remember that In an interview to ET in October 2012, our so popular (among corporate lobby) Finance Minister, Mr Chidambaram had gone to the extent of saying that the Finance Ministry was, if necessary, prepared to "walk alone" if the RBI did not respond to reform measures by cutting interest rates.

Now, I would like to quote a few lines from my above article :

The voice of common man is being crushed by media too and they only highlight the statements which are pro-corporate and pro-bank management....... "RBI knows that cutting rates means stealing from the poor and middle class what little they have right now, in effect kicking the poor man on his stomach. The Shikha Sharmas and Chanda Kochars can step on the poor man's throat to meet their growth targets".

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Now with Mr Rao' statement, it is absolutely clear that the logic for holding the rates by him were exactly in line with our thinking, though owing to his constraints he could not express these so vocally as we could do at that time - we being freelance writer. I would like to congratulate Mr Rao for standing his ground for poor and middle class people in mind. Congress Government, their ministers may shout from roof tops that they are pro-poor, but it is clear that they are playing in the hands of corporates and rich. Undoubtedly keeping inflation under control should be given higher priority as at present time, poor and pensioners are already hard hit by inflation, about which this Government is not able to do anything as they are busy in putting lid to various scams and corruption cases surfaces on daily basis.

There is not a single CMD / ED in the whole Banking industry, who can speak against wrong policy of FM and in favour of right policies of RBI Governor.   Are they afraid of FM or they too are pro rich only?   They either keep silent or openly support FM.    When such a situation arises in a democracy, it is certain that downfall of the country will take place as poor will suffer the most.    However, we at AllBankingSolutions.com will continue to bring TRUTH on the forefront so that our readers love this.

Sale of Gold by Banks :

Another controversial issue on which we have written a few months back is the article with the headlines as follows :

Banks Must STOP Selling Gold Coins, Mutual Funds, Mediclaim Insurance etc. by Rajesh Goyal (uploaded on 12/10/2012)

There was good number of top bankers (GM and above, who are earning handsomely from the commission on sale of MFs, Insurance policies) who were critical of our views.   I would like to again quote few sentences from the above article :-

Selling of gold coins is in no way, bank's core business. Banks by aggressive marketing of sale of gold coins are actually are converting the savings of the economy into dead investments.   Thus it is against the national interest.   On number of occasions branch managers, with a view to meet the targets, ask businessmen to buy these in bulks by using black money.   They do not ask for PAN numbers even if sale is beyond Rs 50,000 and in such cases show a number of sales, each sales being below Rs 50,000 under benami name.   This is unethical and bank management is only promoting the use of black money.   Should banks indulge in such anti national activities for small margins, which are actually not their as the time spent by the staff in promoting this activity is more valuable than the commission earned.   Nowhere else in the world, banks will do such an act for earning small commission.

In case banks are reluctant to stop the sale of gold coins, RBI must come with new guidelines to stop the same as it is proving to be against our national interest

We have again been proved correct as now RBI is seriously worried about increase of sale of Gold at bank counters which is affecting our current account deficit and is leading to inflation and piling of gold purchased from black money.   This is again affecting the poor due to high inflation which is caused by high deficit financing. On 6th February, 2013 reports indicates that RBI is considering of putting curbs on gold imports and can consider stopping import of gold by banks in extreme cases.    Are our CMDs are so self centered that to earn small profit, they are ready to damage the economy of the country by imports of gold coins and selling them.    They do not appear to have any love for the country as they are still awaiting RBI's directives for curbs, rather than take pro-active steps to stop sale of gold coins immediately.   Who stops them from doing this?   Is it the fear of receiving lower bonus if profits dip.   It is shame for the whole banking industry that such powerful people can not take steps in the national interest and are looking towards RBI to issue the ban orders.

I know that many readers will feel that I am too aggressive. I apologize from them.   However, in India nobody understands the soft language. Some of them have become so thick skinned that now even the sharpest criticism has no effect them.   Even this article may fall in deaf ears of top management in banks.   I will feel lucky if at least some of our readers understand and support us in this cause of exposing the corrupt people who are pro-rich.

I hope God will save our banker colleagues who form part of the poor and middle classes only.

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