Indian Economy: News and Discussion

[Concard]

We cannot compare EU / NA norms with our banking system per se...There is a reason why no body likes Ashok khemka.. He is the product of the very system which he is part of... So calling him book worm et all just shows one's lack of understanding as how banking works in india...

As for Current FM, @Haldilal is best on tai...

You realize Banks also have to make profit/money like companies? What do you think is the business model of banks? I see having less interest rate for savings account as a positive. A person who is financially literate will put his/her salary to good use instead of lying in savings account especially there is some disposable income. It is better to go in this direction. It's only when people take a risk by doing something with their money like investing in stocks/mutual funds or starting a small company economy moves forward. There is always a fixed deposit if you want risk free returns with decent interest rate. Make use of it.

 

[Abbey]

 

[Sayman Ame]

Their economies are 90% formalized. They want people to go and spend their money instead of having them in the bank. There are other options where there are no charges for having money in the bank. However, interest rates are so little, people don't bother about it. Monthly fee charges still doesn't deter people from banking services. There are lot of banks which don't have any charges and pays them a decent interest rate. But as you know these banks are mostly not big and somewhat risky.

No, I was asking you how you intended to justify this

If you want more interest rate then make a fixed deposit.

2.7% for a savings account is a big deal.

What you said about the interest rates being negative or too low is fine, and is the case in countries like Japan and some EUroach countries. But why would you want to replicate it in India ?
The Bank Rate itself is arrived at after considering a number of factors like the spread, NPAs, administrative costs, etc. And on top of it, commercial banks choose their lending rate. So when they keep lending rates at around 8%, inflation is at 6% , 2.7% interest on deposits is peanuts.

 

[Sayman Ame]

There is always a fixed deposit if you want risk free returns with decent interest rate

Not against fixed deposits or anything. But it doesn't justify your line of attacking that dude who said low savings rates are hurting small customers. These customers can't afford to keep their money locked in and would want it to be highly liquid. So savings deposit is not only beneficial, but it also comes with attendant benefit of interest rate. Denying them a higher savings rate to force them to illiquid savings is just greed in favor of the banking system.

 

[Kumata]

You realize Banks also have to make profit/money like companies? What do you think is the business model of banks? I see having less interest rate for savings account as a positive. A person who is financially literate will put his/her salary to good use instead of lying in savings account especially there is some disposable income. It is better to go in this direction. It's only when people take a risk by doing something with their money like investing in stocks/mutual funds or starting a small company economy moves forward. There is always a fixed deposit if you want risk free returns with decent interest rate. Make use of it.

Well,

In a capitalistic economies like US / EU, yes banks need to make profit... are we capitalistic economy ... I do not know..

Problem is we resort to be bookworms when narratives do not suit us and we switch once it is in favor..

tell me how many people in india are financially literate . Govt runs all their ponzi schemes via these banks... and If banks / govt wants want peoples money in long terms fixed deposits than they have nothing so far to promote that... infact FM have went ahead and disincentivize savings to a large extend...Infact banks are making huge profits Y O Y .. do they share that with tax payers .. NADA but when their networth erodes.. tax payers are first in line to refinance them....Why ?????

there are many ...why shud i foot the bill when i get nothing off banks..

 

[SKC]

Well,

In a capitalistic economies like US / EU, yes banks need to make profit... are we capitalistic economy ... I do not know..

Problem is we resort to be bookworms when narratives do not suit us and we switch once it is in favor..

tell me how many people in india are financially literate . Govt runs all their ponzi schemes via these banks... and If banks / govt wants want peoples money in long terms fixed deposits than they have nothing so far to promote that... infact FM have went ahead and disincentivize savings to a large extend...Infact banks are making huge profits Y O Y .. do they share that with tax payers .. NADA but when their networth erodes.. tax payers are first in line to refinance them....Why ?????

there are many ...why shud i foot the bill when i get nothing off banks..

Very absurd response!

Why would Banks not make profile in India but in US/EU??????

You are getting enough from bank; you just want more and more! There is no limit to human desire.

 

[Kumata]

Very absurd response!

Why would Banks not make profile in India but in US/EU??????

You are getting enough from bank; you just want more and more! There is no limit to human desire.

Read where i started and what was the original discussion...

It is about interest rates not banks profits..

 

[FalconSlayers]

 

[ezsasa]

Well,

In a capitalistic economies like US / EU, yes banks need to make profit... are we capitalistic economy ... I do not know..

Problem is we resort to be bookworms when narratives do not suit us and we switch once it is in favor..

tell me how many people in india are financially literate . Govt runs all their ponzi schemes via these banks... and If banks / govt wants want peoples money in long terms fixed deposits than they have nothing so far to promote that... infact FM have went ahead and disincentivize savings to a large extend...Infact banks are making huge profits Y O Y .. do they share that with tax payers .. NADA but when their networth erodes.. tax payers are first in line to refinance them....Why ?????

there are many ...why shud i foot the bill when i get nothing off banks..

if one wants lower interest rates, then one should be wishing for more people using banking system, and more people utilising bank credit, then whatever risk banks perceive gets spread over a wider base. for now in India, bank credit is largely a urban phenomenon.

in present circumstances, this entire decade is going to be volatile. be it govt or banks, they don't know what is going to be the situation next year or even a few months down the line, so they will be taking uncomfortable decisions which involves de-risking.

there is a reason everyone is shouting VUCA VUCA.

 

[Cheepek]

The Bank deposits of house holding savings are down from 7 percent to 3 percent

What's the source for this?

 

[Concard]

No, I was asking you how you intended to justify this





What you said about the interest rates being negative or too low is fine, and is the case in countries like Japan and some EUroach countries. But why would you want to replicate it in India ?
The Bank Rate itself is arrived at after considering a number of factors like the spread, NPAs, administrative costs, etc. And on top of it, commercial banks choose their lending rate. So when they keep lending rates at around 8%, inflation is at 6% , 2.7% interest on deposits is peanuts.

I am not promoting negative interest model in India. I am just saying lower interest rates for savings accounts are fine. I don't think it should be more. If anything it is fixed deposit interest rates which needs to match inflation if not exceed it.

 

[Concard]

OPEC has announced oil cuts once again. I wonder what is their plan? Inflation has barely moderated in developed economies and these guys are having cuts again. Oil price increase will have the most effect on us. We need do to something so that our monetary policy is not subject Oil price fluctuations.

OPEC's oil production cut fails to affect fuel prices in India

Petrol and diesel prices in Delhi are ₹96.72 and ₹89.62 per litre respectively.

www.livemint.com

 

[FalconSlayers]

Credit growth at a whopping 15.9%

 

[Kumata]

if one wants lower interest rates, then one should be wishing for more people using banking system, and more people utilising bank credit, then whatever risk banks perceive gets spread over a wider base. for now in India, bank credit is largely a urban phenomenon.

in present circumstances, this entire decade is going to be volatile. be it govt or banks, they don't know what is going to be the situation next year or even a few months down the line, so they will be taking uncomfortable decisions which involves de-risking.

there is a reason everyone is shouting VUCA VUCA.

Unfortunately Problem is not as straight as we are making it out on here. I wonder where all those jan dhan accounts went . IMO, that did introduced many to the banks.

As for Rural credit growth goes, Banks are too be blamed as well. Barring PSU none of the Pvt bigwigs took rural banking seriously & dealing with PSU bankers for the uneducated is like asking for moon. Did banks ever took initiaitves to teach people the importance of credit ... I suspect..

Some nice data for your time pass from horses mouth

https://dbie.rbi.org.in/BOE/OpenDocument/1608101727/OpenDocument/opendoc/openDocument.faces?logonSuccessful=true&shareId=1

 

[iNorthernerOn9]

Hehe... still no substantial increase in defence expenditure!

 

[jadoogar]

That is part of it. Also, some basic necessities of life in India are domestically produced and not exactly linked to international free market. Those are food and most of the medicines. These 2 are cheaper in India.

Here is map of food security from 2017. Situation is a bit different in Pakistan now :

View attachment 199065

Amazing

Japan - once an agricultural powerhouse (rice, rice, rice, (for self consumption) other stuff) is red and importing more than 75% of consumption. Probably they were forced to do so by the "West" - because domestic rice farmers could not be protected under whatever trading rules

Also Japanese farms were small(er) scale... I don't think that the terrain is suitable to large scale corporate type farming -

 

[Haldilal]

Ya'll Nibbiars The Haldilal Goes International.

 

[Haldilal]

Ya'll Nibbiars The Haldilal Goes International.

Ya'll Nibbiars meanwhile the MMS, This Bag can't even hold cash worth 2 crores and it's Wirth that much.

Aur Bolo Amir Loge. Kris sense hai is baat mein?. And you are spending your whole luef to purchase a house worth less than this bag.

 

[another_armchair]

Ya'll Nibbiars meanwhile the MMS, This Bag can't even hold cash worth 2 crores and it's Wirth that much.

Aur Bolo Amir Loge. Kris sense hai is baat mein?. And you are spending your whole luef to purchase a house worth less than this bag.


View attachment 199186

Ameer logon ke bade shauk.

 

[sameer3694]

OPEC has announced oil cuts once again. I wonder what is their plan? Inflation has barely moderated in developed economies and these guys are having cuts again. Oil price increase will have the most effect on us. We need do to something so that our monetary policy is not subject Oil price fluctuations.

There's nothing we can do unless we magically find huge amounts of oil reserves somewhere.