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It’s well known now that RBI is no more an independent institution, and it’s going to destroy the economy of the country as directed by the Corporates. But its actions are alarming.

​Firstly, to help the Corporates to get loans at cheaper rate (though they seldom repay), the interest rate on deposits have been brought down steadily.  Look at the chart below

  • Year       Max Interest Rate
  • 2011         9.25
  • 2012         8.75
  • 2013         9.00
  • 2014         8.50
  • 2015         7.50
  • 2016         7.10
  • 2017         6.25
  • 2018         6.85
  • 2019         6.25
  • 2020         5.40
  • 2021         5.40
(Source: SBI Website)

​Now the RBI says there won’t be any automatic renewal of fixed deposits as practised till now. Instead, the customer will get only Savings Bank Interest Rate, which is 2.5% PA in most of the Banks. The customer has to renew it by going to the Bank or giving instructions on the due date of the Fixed deposit.  Majority of the depositors are small depositors and pensioners. If they forget the due date, they will lose, though the Bank will be using the money for its loans.

​Second, the RBI has restricted withdrawals from the Bank through ATMs, withdrawal slips or cheques to 4 transactions per month. At ATMs, a balance enquiry is also counted as a transaction. After the four transactions, the customers have to pay Rs.21+GST per transaction.  The Banks are dependent on the deposits for onlending. If the customers decide to withdraw all the money at one go, the Banks will collapse. But RBI doesn’t care.

​Third, the RBI has included small trades under Micro and small enterprises meant for Industry & services. As such, hardly 15% of the SMEs get bank loans, which will further reduce as Banks will find it easier to lend to traders and existing small and micro enterprises will not get credit.

​Fourth, RBI says Google Pay is not an approved platform for payment under the payment system of India. But Google claims it is. And G Pay continues to enjoy access to all Bank accounts, and it doesn’t look like that RBI is going to stop G Pay from functioning in India.

​Fifth, the small loans are going down drastically and RBI does not care to intervene. Rather, it is encouraging Banks to lend to Non Banking Financial Companies and Micro Finance Institutions, which fleece the people.

Will Mr. S. Gurumurthy do anything to correct these, or is he behind all these actions?

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

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