Money & Banking
Chakrabarty for less disparity in deposit rates on all amounts

RBI want banks to offer more or less similar rates to all depositors, although a reasonable difference is fine instead of treating poor customers badly by offering lower rates on their deposits and reward the rich with higher prices

 
Mumbai: Reserve Bank of India (RBI) deputy governor Dr KC Chakrabarty has berated banks' tendency to offer better interest rates to high-value deposits, reports PTI.
 
"I don't understand why banks treat poor customers badly by offering lower rates on their deposits and reward the rich with higher prices. I am not saying both should be at par, but the prevailing different rates are bit too high.
 
"We at RBI would want banks to offer more or less similar rates to all depositors, although a reasonable difference is fine," the senior most deputy governor told a gathering at the MR Pai memorial award function (the award was given to women's self-help group Sewa).
 
The late MR Pai was a crusader for the rights of bank depositors.
 
Referring to the minimum balance requirement for savings accounts which currently varies from Rs500 to Rs50,000 for a quarter, and also the varying penalties for not maintaining the required balance, Chakrabarty said, "In fact banks are charging this fee without giving any service to the customer."
 
Therefore, he said, RBI has made it mandatory for banks not to turn down anyone who wants to open a basic bank account, if he/she can provide the KYC documents.
 
On the service charges which banks make customers pay, Dr Chakrabarty (who looks after customer service and banking operations at RBI among other things) said these charges are in fact "survival charges and not service charges".
 
On the need to discourage gold consumption, he said there is a crying need to raise the awareness among the people especially the poor that investment in gold is not productive, and a poor man can never make money by investing in gold.
 
When asked later if RBI is planning to disallow banks from selling gold coins, he said it was not an illegal activity and "hence we cannot do anything".
 
Gold imports touched $60.6 billion last fiscal, which also pushed down trade balance, widening the current account deficit which hit a 30-year high of 4.3%.
 

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COMMENTS

PPM

4 years ago

If it is not possible to make money in Gold, let RBI sell the gold it purchased during last year.

Now, India is ruled by economists who do not know economics and we have bankers who do know banking.

M G WARRIER

4 years ago

If he has not been quoted out of context, Dr Chakrabarty's observation that as selling gold coins is not an illegal activity and therefore RBI cannot do anything is misleading. If it was an illegal activity, law will take its course and the question whether RBI is contemplating any restriction would not have arisen. RBI should play at least a proactive role by discouraging import of gold coins and gold in general for that matter by acting in coordination with GOI to bring domestic stock of gold into the mainstream and encouraging productive deployment of such gold stock. If the Deputy Governor uses his 'good offices' to prevent use of gold for making doors and plating roofs or flag-masts it will be a great service.

REPLY

Ashish

In Reply to M G WARRIER 4 years ago

Gold is Money,which can't be debased according to the Whim and Fancies of Central Bankers and Governments.

If the Clowns in the Government try to Ban Savers from Diversifying into Gold;it will just lead to rise of the next Dawood Ibrahim.

Gold is Money and every Single Indian knows the Truth.

M G WARRIER

In Reply to Ashish 4 years ago

I am with you, Ashish! Gold should get the respectability and grace it deserves. I take your comment as in response to the story rather than my comment. As you used the reply icon, I am clarifying.Thanks M G Warrier

Government to place views on coal blocks before PAC by 14th September

The Public Accounts Committee of the Parliament chaired by BJP leader Murli Manohar Joshi has decided to examine the government auditor's report on coal block allocations, along with three other latest reports of the CAG

 
New Delhi: Amid furore over coal blocks allocation, the government will place its views before Parliament's Public Accounts Committee (PAC) by 14th September on the observations made by the Comptroller and Auditor General (CAG), reports PTI.
 
"The Coal Ministry will submit its comments to the PAC on CAG's observations on coal blocks allocations by September 14," a top Coal Ministry official told PTI.
 
The PAC, chaired by BJP leader Murli Manohar Joshi has decided to examine the government auditor's report on coal block allocations, along with three other latest reports of the official auditor CAG.
 
The Ministry is likely to contend before the Parliamentary panel that the estimates by the government auditor should not have been done in the manner it was made.
 
The Comptroller and Auditor General in its recent report has estimated undue benefits to the tune of Rs 1.86 lakh crore to private players on account of coal blocks allocation to them without resorting to auction.
 
With Congress and BJP locking horns over CAG report on coal inside Parliament, its ripples are likely to be felt in the meetings of the PAC when the issue is taken up for scrutiny.
 

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COMMENTS

M G WARRIER

4 years ago

This may not be PAC’s job under the present dispensation. But, as Parliament is not able to discuss issues or carry out even scheduled business, this PAC may deliberate on the systems that could be put in place, at least to assess with professional help the loss to the exchequer(read India) by adhocism in governance, on a case to case basis. Confusing, isn’t it? Let me be more clear. When CAG report on coal block allocation is examined, PAC should assess the possible gains/losses(say beyond a margin of error in assessment of +/_ 20 per cent) the organisations/individuals benefited by the allocations may make/incur in the next 5 years. PAC could also consider whether there could be any method to ‘tax’ windfall gains or compensate unexpected losses.
M G Warrier

Live From A Lounge: Brace for fee impact

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