Take care of the depositors who support the economy

The banks act smart and the borrowers act smarter and the authorities both the Government and the RBI squeeze the tax payers and the depositors respectively as they have no voice or representative body to fight for them. Only crying baby will get the milk is what is evidenced the way the authorities act. The Reserve Bank cut its policy rates three times by 0.75 basis points in all as per the demands of the Government, and the borrowers in particular but the banks hoodwinked both by cutting the rates by just 0.30 basis points whereas the deposit rate has been cut more than by 1.25 %. The NPAs have increased by manifold under the cover of economic slow down and the defaulting borrowers have their own ways and means to evade and avoid payments to banks and their representative bodies like FICCI, CCI, Exporters Association and other business cartels make a hue and cry for reduction of interest rates and do nothing to bring down the NPAs of banks. Unfortunately the tax payers and the depositors bear the brunt and are made to support the economy. While depositors have to pay Income tax on the reduced interest earned on their fixed deposits, the tax payers have to contribute to the capital of banks through budgetary resources. The depositors particularly retirees who depend on the meager interest payments from banks have noother avenues what so ever to make better returns without risking their hard earned savings. The insurance coverage in banks is also a pittance of Rs one lakh fixed in early 1990s without any change what so ever afterwards. Depositors particularly senior citizens are being taken for a ride by the authorities and their survival is becoming increasingly difficuly day after day. It is time the Government and the RBI in particular keep a very close watch on Banks functioning and see that they take care of depositors with whose money they are in business.

 Dr T V Gopalakrishnan