Bengaluru bank blames 62 dud loans for crisis
Bengaluru: Assuring depositors that their money was “100 per cent safe” with the bank, Sri Guru Raghavendra Sahakara Bank Chairman K. Ramakrishna, here on Monday, said 62 loans had locked up Rs 300 crore of deposit.
“Your money is 100 per cent safe with Sri Guru Raghavendra Sahakara Bank. It’s my responsibility,” Ramakrishna said at Sri Guru Narasimha Kalyanamandira auditorium, to assure depositors.
Because of these 62 dud loans, the Reserve Bank of India (RBI) had restricted the lender from executing business, he said amid shouting by depositors.
To assuage customers, the call to an assistant commissioner of police by Bengaluru South MP Tejaswi Surya — not present — was relayed on loudspeaker live and the MP claimed that he had spoken to Finance Minister Nirmala Sitharaman to help the customers.
Ramakrishna said he would meet customers again on January 19 with all the details and numbers.
Dramatic scenes and pandemonium ruled the auditorium before his arrival. Thousands of bank customers threatened to go en masse to the police station and file a case against Ramakrishna.
As he addressed the gathering in Kannada, hundreds of depositors shouted back at him seeking clarifications.
“The bank is saying I can’t withdraw more than Rs 35,000. In case of our fixed deposit maturing, we will have to renew it as we can’t encash it, ” said Nagaraj M, 49, who has been dealing with the bank for the past six years.
At the auditorium, thousands of depositors earlier demanded the bank chairman’s presence to clarify the matter.
The lender had invited depositors to the auditorium at 6 p.m. to update them on the bank’s status, following a RBI directive restricting the bank from doing business with immediate effect.
“We want the bank’s directors here,” shouted a depositor from the stage. A handful of policemen were trying to control the crowd and bring order to the assembly.
Many elderly and retired persons had arrived to know the fate of their savings. Several women were also present at the meeting.
“It was a good bank with only 0.5 per cent NPAs. Now we can’t trust any bank. See what happened with the PMC Bank,” said another customer.
Shankar Sharma, 38, an employee of a private company, said majority of depositors were senior citizens and retirees. “I don’t have an account with the bank, but my mother, uncle, aunt have deposited money in it. I came for them, ” said Sharma.
He said many of the bank’s 35,000 clientele deposited more than Rs 5 lakh, which had total deposits of Rs 1,600 crore. The bank started operations in 1999.
Ramakrishna was escorted away to safety by the police after his speech even as the depositors were screaming and agitating for justice.
I must admit, I am not successful in money dealings, yet, I think to minimise the risk, we need to follow the age old adage: Do not put all eggs in one basket.
2) Risk and returns are proportional
This economic mess no doubt was created by UPA between 2004-2014 through their corny capitalism but Modi-G has exacerbated it by not doing anything about it in the last 5 years. Instead he has gone on a reckless spending binge since 2014 to make it worse. We are seeing the fruits now. Now the experts hoping for him to come to the rescue is like expecting the undertaker to resuscitate the dying patient in the ICU. They are effectively asking for the help of the scissors to stitch 2 torn pieces of cloth.
Modi-G has intentionally kept stooges at the key locations so he can get his way of providing the pork-barrel to the electorate by using public/taxpayers’ money. While I have all the appreciation for this other policies, when it comes to economy & finance the central BJP government is no better than some of the leftists governments elsewhere, who just borrow forever in order to stay in power. He clearly does not understand money nor the concept of economics. But one thing I can guarantee you, by the end of his term, through his reckless monetary experiments, he will have gained enough experience in the field of finance that he will be invited to Oxford and Yale to deliver lectures.
Coming back to the present, I expect the Indian economy to turn down hard towards the end of this year. We will have shocks in the banking sector as well as the stock market while inflation will creep up. The incompetent Sitaraman will be “promoted” to a lesser ministry so Modi-G can wash his hands off the episode. The governments as usual will not take any responsibility for their failures, instead will commit more blunders… just like those incompetent doctors during the medieval times who thought bleeding the patient was the only way to save him and when the patient died in the end, they would claim the reason for death was that the patient was not bled fast enough.
On one hand, with his demonetisation and the push for digital money he is forcing people to go cashless and on the other hand people can not get to their money because of the failing banks. So what kind of message is he trying to send to the population? Does he expect people to abandon the Rupee and hoard gold? With the demonetisation, if he had made an example out of a couple of high profile corrupt politicians perhaps he would have maintained some credibility but not one person has gone to jail till date. So we can safely surmise that DeMo was a massive failure, an unmitigated cock-up.
Now he will have tough time fighting the 2024 elections because once inflation catches up population becomes restless. Unless he pulls another rabbit out of the hat he has tough time winning the next election. And that rabbit appears to be raiding the bank lockers for stealing gold and if that happens he will set the whole country on fire. Mark my words.
ಮಂಗನ ಕೈಯಲ್ಲಿ ಮಾಣಿಕ್ಯ
If BJP can not gain majority in the next election, no other party will and then you watch the fun unfolding in the economy. When bahen, didi, and madam form an alliance to form the government so they can keep themselves out of jail, the country is going to suffer massively.