RESERVE BANK OF INDIA TO GET MORE CONTROL OVER CO-OPERATIVE BANKS

The Reserve Bank of India will soon take full control of the co-operative banks due to the current fraud cases that have been making headlines in the banking sectors. It will soon be developing strict rules and regulations to prevent any of these cases from happening in the future. The banking sectors have been experiencing several backlashes as depositors are losing trust irrespective of the safety of their hard-earned money in the protection of banks. The fraud cases that have been occurring within the banking sectors date back to 2014, which have been left neither investigated. There has been no one rendered accountable for the fraud cases and depositors are now demanding that the RBI take full power over the functionality of the banks in India.

The Reserve Bank of India owning full power over the co-operative banks has been demanded to do so to put an end to these severe cases of fraud. According to sources, the urban co-operative banks have announced over 1000 cases of fraud which were worth over Rs. 220 crores. One of the recent cases that caused a big storm is the Punjab and Maharashtra Co-operative bank fraud that led to several Indian families and households unable to redraw money and as the case still continues, many depositors await a remedial measure and resolution towards the inconvenience caused by the fraud.

There have been changes approved by the Banking Regulation Act (BAC) to grant the Reserve Bank of India authority to make changes in the cooperative lender’s regulations and prevent such frauds as the one observed in the Punjab and Maharashtra co-operative bank. These cases affect the functions of families who trust banks to safeguard their savings, many of whom haven’t received their refund yet. This is a big dent in the banking system regulatory system. The Reserve Bank of India is expected to carry out critical supervisions and also restart new investigations to see the holes in the banking sectors.

The amendment would be cleared by the Parliament and furthermore, the cooperative banks would be audited adequately according to norms of the Reserve Bank of India and the central bank as well. This would be carried out in consultation with the state government and if any cooperative bank is found to be under stress, the RBI would be responding with relief measures. The Reserve Bank of India would also be responsible for appointing the chief executives of every co-operative bank and commercial banks as well.

However, the Cooperative banks in India are now under the authority of the Registrar of Cooperative Societies (RCS) and the Reserve Bank of India. The role of the registrar of cooperative societies includes supervising the incorporation, registration, management, auditing of the board and liquidation process. The Reserve Bank of India is also responsible for regulatory functions such as maintaining capital adequacy and also the cash reserves. The banks are going to be audited according to the Reserve Bank of India guidelines and recruitment of employees for the management of the banks will be based on the qualifications approved by the RBI as well. The RBI is implementing these guidelines in a phased manner to protect the interest of the banking sector and the depositors as well.

Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.

PUBLIC SECTOR BANKS TO BE MERGED TO FURTHER THE NEW INDIA PLAN

The open region bank’s financial crisis has influenced the consolidating strategy where the organization of India is genuinely finishing. In the prior year, the organization had revealed the mix often open fragment banks into four and would continue merging in order to make six overall evaluated banks. The longing to make changes that would provoke another India with more prominent headway progress and improvement. As far as possible 2020–21 has been the backbone of a key course of action figured by the organization to build up the falling portions, for instance, land, vehicles, etc. As the open portion banks (PSB) crisis and commitment accumulated as a result of the nonattendance of enthusiasm for a couple of parts have provoked the new association plan by the organization. The action is to decrease the number of open zone banks in India.

Beginning at now, the organization has chopped down a couple of open section banks from 27 to 12 would, regardless, continue with this breakdown this year. As showed by reports, the council has successfully mixed and recapitalized these banks. Furthermore, Insolvency and Bankruptcy Code (IBC) has increased more than ₹4 lakh crore to the banks. Further association or merger is communicated to depend upon the need to ascertain incorporated the new India arrange a plan. The course of action for an overall evaluated bank plan would be practiced through the mix of the open part banks which would help support the authoritative objectives to make India a 5 trillion economy by 2024 to 2025.

The combination would help give more prominent banks an increasingly broad go to, the ability to credit more, give better things and the best possible development to serve customers of New India. In the year 2019, the organization revealed plans to mix the United Bank of India and Oriental Bank of Commerce with Punjab National Bank which has made the suggestion the second greatest open section bank in India (PSB). There have in like manner been decisions made to unite Syndicate Bank with Canara Bank, while Allahabad Bank will be combined with Indian Bank. In like manner, Andhra Bank and Corporation Bank are to be gotten together with Union Bank of India.

As demonstrated by the reports, the State Bank of India (SBI) mixed five of its accomplice banks, for instance, the State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad and moreover Bharatiya Mahila Bank. Bank of Baroda made its underlying three-way merger which incorporated the amalgamation of Vijaya Bank and Dena Bank.

The governing body of India is similarly advancing toward improving the agricultural parts. It has given Rs. 2. 83 lakh crore to help farmer welfare, common improvement, and cultivating purposes in India. In like manner, the inspiration is to improve farmer’s compensation in the accompanying two years. Likewise, the governing body has extended the credit centers in cultivating to ₹15 lakh crore for the accompanying money related year. There will progress new organizations and improving the establishment in preparing and besides reinforce young business visionaries in the new India.

Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.

INDIA’S ECONOMY SLOWDOWN IN 2019

The Indian economy in 2019 had experienced a slowdown in some of its sectors. For example, the real estate sector struggled with growth and investors moved away from housing realty to commercial reality. The stalled projects in the housing realty led to a lot of issues for the sector which also affected the Indian economy as a whole since this sector is one of the major instruments for the growth of the economy. Although the report of the economy going through a recession was false, it didn’t just hit the expected growth. The Indian economy experienced more of a slow progression, but it wasn’t a recession for India. The reasons for this slow down are due to a lot of reasons such as demonetization, goods and services tax (GST), etc.

According to the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva stated that the growth projections had to be revised and a downward fall to four percent was experienced in the year 2019. However, the expectation for this year is at a 5.8 percent growth rate and for 2021, the expected growth rate should be at 6.5 percent. Also, the non-banking financial institutions in India went through a lot of unsteady and uncertainty, in which the union budget 2020 is supposed to provide relief to the sectors as banks are not supporting the proposal of the government to grant the non-banking finance sectors loans and monetary funds. Also, the demonization and unified tax system proposed by the government proved to have short term impact, there is no denying that they do have long term benefits after a period of time. Even though, they may have been disruptive for the short term.

The IMF has stated to remain optimistic on the growth of India, as the budget session goes on what could be hoped for is that the government procures remedial measures to help find solutions to the problem that led to the slowdown of the economy in 2019. The process of regaining back the economy to a stable and progressive point, towards the end of last year, the government had pumped in crores of rupees to revive the real estate sectors and provide funds to developers.

Several measures have been taken in other sectors and various sectors have put in place demands in policies that would be revised in the union budget. For example, the gold industry expectations for the budget in terms of import duties to ease the illegal smugglings and also revive consumer demand through the hallmarking policy, etc. The budget revenue collection has been below the target and it is necessary to increase budgetary revenues so as to improve the fiscal positions. Tight spending won’t be the right way to go about it this year, there should be a way to improve collections from the revenue side.

Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.