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Banking Reforms In India - Are they in the best interest of the country?

Question asked by Kaustubh Katdare in #Coffee Room on Oct 13, 2013
Kaustubh Katdare
Kaustubh Katdare 路 Oct 13, 2013
Rank A1 - PRO
I'm shocked & stunned after reading about the proposed and upcoming banking reforms in India initiated by the Reserve Bank Of India (RBI) in ET. The newly appointed RBI chief, Harvard & IIT educated Raghuram Rajan's solution to all the financial mess is to invite all the foreign banks in India and offer them a 'national treatment'. These banks would be allowed to take over Indian banks and Raghuram Rajan wants that to happen.

Of course, we Indians believe him because he's a Harvard alumni, speaks English in foreign accent and also wears a suit and ties a tie like a pro! He can throw financial jargon like it's coming out of Merriam - Webster. He can do no wrong!

But no matter how many times I try to convince myself - I think it's a financial suicide! You let foreign banks enter your country and control all the people's money! So as I understand this - the Government of India wants the retail to be controlled by the foreigners, the fuel prices to be controlled by the foreigners and now - all our money to be controlled by the foreigners. It also wants Indians to work for all the foreign countries. Isn't the situation similar to the pre 1947 era; when the foreigners controlled everything in this country?

Or am I just running my imagination wild? Do you think the proposed banking reforms are in the best interest of India? Posted in: #Coffee Room
Sahithi Pallavi
Sahithi Pallavi 路 Oct 13, 2013
Rank A2 - PRO
Yeah it is one of the aspects of upcoming banking reforms. Of course he says we are going to offer 'national treatment' but he did mentioned two conditions. Please don't ignore them, they are equally important.
1. It can come only through the subsidiary or branch.
2. Even that country should allow the same for our banks.


Kaustubh Katdare
But no matter how many times I try to convince myself - I think it's a financial suicide! You let foreign banks enter your country and control all the people's money! So as I understand this - the Government of India wants the retail to be controlled by the foreigners, the fuel prices to be controlled by the foreigners and now - all our money to be controlled by the foreigners. It also wants Indians to work for all the foreign countries. Isn't the situation similar to the pre 1947 era; when the foreigners controlled everything in this country?
Or am I just running my imagination wild? Do you think the proposed banking reforms are in the best interest of India?

You are right that our currency is being controlled by foreigners. But not only India's, almost all the countries economies are depending on either US $ or or some other and that's because of the International trade, Globalization. No country can stay on it's own and I mean no country is self sufficient in all the aspects. One or the other way, it has to depend on the other either for food or Hydro chemicals or Machinery etc. and there comes the WTO, problem of currency exchange, financial problems etc
And according to WTO, all its members should open the doors for others accepting FDI etc etc and there are certain conditions for that. Therefore no country is intentionally want to allow foreigners to control us and it is so required in this global era according to the needs of the country.

And there are certain things even in our hand to control our economy and measures are also been taken for that.

And one sad thing is even after opening doors of India to foreigners, not many are interested to come in even NRIs because of known reasons like lack of political stability, financial stability, tougher norms, tax problems, bad conditions etc etc. So I think we need not worry much about this 馃榾
Kaustubh Katdare
Kaustubh Katdare 路 Oct 13, 2013
Rank A1 - PRO
Well, have we convinced that each country genuinely cares for the economy of the other country? Also, is United States the 'parent' country of every other country in the world that they care about other economies? I often wonder why is India so crazy about getting dollars? Do we use dollar or rupee as our currency?

The nature never 'raised' its prices - all the resources nature provides are available free of cost and India has all these resources in abundance.

If Globalisation is exactly what it's advertised as - tell me how many Indian banks control the banks in the United States? How many Indian companies are 'selling' Indian products in the United States or UK or Australia? My objection is that the inflow of the companies is LARGER than the OUTFLOW.

WTO is all man made and has been formed only to ensure that the developed nations get easy access to the resources available in the developing countries. If globalisation is what we need - are we OKAY letting other countries run every aspect of our lives?
Anand Tamariya
Anand Tamariya 路 Oct 13, 2013
Rank B2 - LEADER
Nationalism is alright - but what people want is smooth transactions with as less headache as possible. Even without these amendments, I have my savings account only with private banks.
Kaustubh Katdare
Kaustubh Katdare 路 Oct 14, 2013
Rank A1 - PRO
We aren't talking about nationalism. Being owned by the Government is no excuse for banks to be less efficient. What Raghuram Rajan is doing is putting up a band-aid on the head for a wound in the feet.
Sahithi Pallavi
Sahithi Pallavi 路 Oct 14, 2013
Rank A2 - PRO
Kaustubh Katdare
Well, have we convinced that each country genuinely cares for the economy of the other country? Also, is United States the 'parent' country of every other country in the world that they care about other economies?
it might not be the parent country but it is the world's largest economy. Generally the dominating currency would be considered. Even the developing nations are fighting with WB, IMF to consider alternate currency other than $.
I often wonder why is India so crazy about getting dollars? Do we use dollar or rupee as our currency?
Yes of course India is crazy about getting dollars as our CAD is widening day by day and we can't pay them in Rs.

The nature never 'raised' its prices - all the resources nature provides are available free of cost and India has all these resources in abundance.
Nature never raise the prices but it is the demand that makes the prices raise. Increasing in population and depletion of resources makes the time tougher. India is the world's second largest population country in the world and demand keeps on increasing and by the way India is not self sufficient with Hydro chemicals, gold etc.
If Globalisation is exactly what it's advertised as - tell me how many Indian banks control the banks in the United States? How many Indian companies are 'selling' Indian products in the United States or UK or Australia? My objection is that the inflow of the companies is LARGER than the OUTFLOW.
Yes that is the biggest problem and that makes our CAD widening like anything. If we don't invite FDI and others, the CAD will outburst like anything. Even there is a problem from our side also. Many countries are rejecting our exports because of lack of quality and proper storage conditions and many other reasons.

WTO is all man made and has been formed only to ensure that the developed nations get easy access to the resources available in the developing countries. If globalisation is what we need - are we OKAY letting other countries run every aspect of our lives?
WTO is in favour of developed nations that I agree. That's the reason, we, the developing countries are formed in to some organizations like BRICS, ASEAN, SAARC, BASIC etc etc. and like world bank the developing nations also established a bank called Asian Development Bank (ADB) for helping one another. Even the developed countries help us for tech know how.
Sarathkumar Chandrasekaran
Rank A2 - PRO
(I am not a expert but a view of a common man)
similar outbursts raised during the introduction of Globalization and people feared that it will ruin the local market and business in India but the predictions did not happen and Globalization led to rise of India and development of India especially in economy .Allowing more investment and foreign banks would not have a bad impact on India and we have to wait a little to see the real outcome of it and at the end we have to remember that we can't change much.
Kaustubh Katdare
Kaustubh Katdare 路 Oct 20, 2013
Rank A1 - PRO
I believe we need to start this discussion at a very basic level. Do people even know that >70% of India still has to fight for the basic needs?

Global companies won't put people out of jobs. They would exploit them for cheap and acquire local brands. Do people remember that coca cola took over Indian thumps up so all employees of thumps up aka Parle group became employees of coca cola. Bata sells Indian made shoes to Indians for insane profits and takes them to Canada. Are people okay with that?

...all in the name of globalization.
Sarathkumar Chandrasekaran
Rank A2 - PRO
Kaustubh Katdare
I believe we need to start this discussion at a very basic level. Do people even know that >70% of India still has to fight for the basic needs?

Global companies won't put people out of jobs. They would exploit them for cheap and acquire local brands. Do people remember that coca cola took over Indian thumps up so all employees of thumps up aka Parle group became employees of coca cola. Bata sells Indian made shoes to Indians for insane profits and takes them to Canada. Are people okay with that?

...all in the name of globalization.
You had convinced me and another thought comes to mind where people were lured towards foreign companies with attractive deals and we had forget the essentials power and needs such as necessity of agriculture .They had dig all the resources from us including ground water for making carbonated soft drinks and sell it to us at a high price. They know how to market a product and we have been on the losing side every time.If possible please state the disadvantages of this new policy over India.

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