Narendra Modi continues with the poor governance of earlier regimes
On 5th November, Union minister Ravi Shankar Prasad was on television announcing a massive Rs2,375-crore infusion of funds into 23 district central cooperative banks across the country. These include 16 banks in Uttar Pradesh, three each in Jammu & Kashmir and Maharashtra and one in West Bengal.
The minister said that the move was aimed at protecting small depositors. A Cabinet meeting that approved this capital infusion at taxpayers’ expense had imposed some meaningless conditions like growing deposits at the rate of 15% and halving bad loans over the next two years. On 30th June, The Mint had reported that 45 cooperative banks were likely to face penal action by the Reserve Bank of India (RBI).
Of these, 23 did not even have licences and would need Rs2,100 crore even to meet the 4% capital adequacy ratio. These 23 seem to be the ones that have received taxpayers’ money.
The action sets a terrible precedent by ignoring the fact that cooperative banks are in a mess because of dual regulation, political involvement and interference in their management and the fact that large chunks of their irrecoverable loans are usually to politically connected persons who are wilful defaulters.
Consequently, cooperative banks are poorly regulated and fail, with alarming regularity. Unfortunately, most people are unaware of the poor supervision of these banks which usually target small depositors with higher interest rates. Interestingly, while banking decisions are hugely susceptible to political pressure, the government has ensured that deposits of up to Rs1 lakh of all banks, including cooperative banks, are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
It is important to remember that a previous BJP-led National Democratic Alliance (NDA) government (1999-2004) had not hesitated to get a pliant RBI governor and DICGC to bend the rules for Madhavpura Mercantile Cooperative Bank (MMCB) after the Ketan Parekh scam of 2000-01. MMCB’s management had destroyed the Bank by lending nearly Rs1,000 crore to scamster Ketan Parekh. Under DICGC rules, deposit insurance is paid out only after a bank goes into liquidation. An exception was made for MMCB, to appease a powerful BJP minister and several hundred crore rupees were paid out. Those days, a decimated Congress, as the leading opposition party, did not protest. It will be a sad day for financial consumers if history repeats itself and a powerful BJP government decides to protect shady cooperative banks instead of bringing them under the clear and unambiguous regulation and supervision of RBI.
Fraudsters are found targeting military members through bogus services and scams. Don’t get fooled
Veterans who have served the country often have unique concerns specific to their military service, such as finding a job when they return home or filing for certain benefits they have access to through government programs. Unfortunately, fraudsters know this too and target military members through bogus services and scams. Here’s a list of areas where scam artists sometimes prey on veterans with links to what vets can do to avoid getting ripped off.
Service members also have some unique consumer protections provided by federal law. Read more about those protections here.
For further information about protecting veterans from fraud, click here.
Uddhav Thackeray has written to the secretariat of Maharashtra Legislature seeking appointment of party's group leader Eknath Shinde as the leader of opposition
Ending the days of high-drama, often one-sided, the Shiv Sena on Monday staked claim for the seat of Leader of Opposition (LoP) in Maharashtra Assembly. Either the Shiv Sena leadership is using this as part of its 'pressure' tactics on chief minister Devendra Fadnavis and his Bharatiya Janata Party (BJP), or may have simply gave in to 'unbearable' humiliation and endless waitings.
Shiv Sena president Uddhav Thackeray has written to secretariat of the state legislature seeking appointment of party's group leader Eknath Shinde as the LoP, say reports.
Earlier, members of legislative assembly (MLAs) from Shiv Sena elected Eknath Shinde, a loyalist of party chief Uddhav Thackeray as its leader in the house. Shinde, who won from Thane for the second time, would become the LoP, unless there is any (?) last minute deal between BJP and Shiv Sena.
Separately, Nationalist Congress Party (NCP) chief Sharad Pawar reiterated that the party’s offer to support the BJP government in Maharashtra must be seen as an endeavour to have a stable government in the State. Asked if he has sent a letter of support to the governor, he said, “why should we give anything in writing. We know how to act in the floor of the house.”
NCP abstaining from a vote will bring down the effective size of the house to 247, bringing the BJP within sniffing distance of comfortably winning the trust vote in the 288 member Assembly.
BJP has 121 MLAs in the 288-member House and the 41-member NCP has assured its outside support to the new government. Sena, led by Uddhav Thackeray, has 63 MLAs.