FRDI Bill: If depositors move out of PSBs who will finance SMEs, farmers and infrastructure?
The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, which potentially threatens to convert public deposits into equity to bailout bankrupt banks is spreading panic among depositors despite ineffectual reassurances from the government. The badly thought through bill, which seems to tick-box a G-20 commitment by India, however has serious implications for the economy if implemented.  
 
Reports from banking sources indicate that savers are making enquiries about moving money from PSBs to large private sector banks. If the trend picks up, what will be consequences? The biggest losers will be lossmaking Public Sector Banks (PSBs). Given the shaky financial condition of most public banks, deposits in these banks are very much at risk. According to the Financial Stability Board (FSB) Peer Review Report August 2016, 63% of the financial investments ordinary Indians make are within the banking system. If panicky depositors withdraw money from PSBs it puts at risk funding available to crucial sectors of the economy.
 
PSBs are the only source of funding for infrastructure. In fact, they overextended themselves to that sector in the post-2009 period, which is a big cause for their bad loans. With deposits being withdrawn from PSBs, infrastructure financing will be totally crippled. Two, PSBs are also a major source of financing small and medium enterprises (SMEs), which are the backbone of the economy and lead the effort in job creation. Banks will be forced to cut down on lending to them. Third, PSBs alone have the network and the compulsion to extend loans to farmers. This is another vital segment of the economy that will be starved of funds in case the panic about bail-in clause spreads. Fourth, PSBs have been lending to a host of government organisations, only because of implicit government guarantee – these funds will also dry up. 
 
Large private banks, which will be the gainers from this flight of deposits are uninterested in these sectors and are unlikely to be arm-twisted into lending to loss making government entities. 
 
Once the bail-in provision is widely known, there will be a run on PSBs, at the slightest hint of trouble. It will be impossible to control and to prevent a domino effect. It is time the government starts communicating with the public how the Bill will work in real-life situations, before more panic sets in. In fact, the FRDI Bill is incongruous with the structure of the Indian banking system and must be dropped to protect PSB, which have been allowed to amass colossal bad debts.
 
By way of background, the FRDI which will be introduced in the Parliament soon, aims to create a Resolution Corporation (RC) which will ensure that as and when banks, insurance companies and other financial institutions become bankrupt, they are handled in a systematic and orderly manner without being bailed out by taxpayers’ money. The main job of RC would be to ensure enough of capital is provided to the failing institution so that it can absorb losses and ensure its survival. While this objective, one of the key provisions of the Bill has come under intense scrutiny and that is, the so-called bail-in clause.
 
The bail-in empowers the proposed RC to cancel a liability owed by the bank or change the form of an existing liability to another security, such as shares. All of us are aware that money in a savings or fixed deposit account is a liability owed by the bank to its customer. The bank promises to repay the money when demanded by the customer. Since the customer has not taken any security from the bank when handing over his money, legally, the customer is an unsecured creditor of the bank. 
 
With a ‘bail-in’, the bank simply refuses repayment of a customer’s money or instead issues securities such as preference shares (with no guarantee of fixed dividends) to a customer. This is in lieu of his deposits which are then used to recapitalise the bank. The only money owed to depositors that cannot be bailed-in is the amount covered by deposit insurance. The government is planning to repeal The Deposit Insurance and Credit Guarantee Corporation Act, 1961, which insured deposits worth one lakh for each depositor and raise the amount. The FRDI Bill further empowers the Resolution Corporation to decide the amount insured for each depositor. Thus, it is possible that the insured amounts will not only vary for customers in different banks, but may also be different for different customers of the same bank.
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COMMENTS

T.A.Krishnamoorthy Iyer

11 months ago

I HAVE FIXED DEPOSITS IN AXIS BANK AROUND 50 Lakhs. AS Axis Bank is making Profit is my deposit safe as because of panic of FRDI.
Please Advice what to do?

Ram Gopal Gupta

12 months ago

I as a depositor is worried for my hard earned money in a PSB. The only option is to transfer money in a private bank of repute if there no assured step is taken by the government.

RanjitK

1 year ago

In all this Confusion - let me make a few things Crystal CLEAR.

1. Present situation is - Govt Bail OUT (& Govt Support) is IMPLICIT ..in all Indian Banking ! That is the Position TODAY.

The Bill, if passed - will Make BAIL IN Legal.

So Substitution of IMPLICIT BAIL OUT by Govt .. BY BAIL IN by DEPOSITORS ..becomes a possibility.

THAT is a RETROGRADE STEP - Dangerous for Depositors. Esp when 65% to 85% Deposits are with Govt Banks.

2. The BAD Loans are due to Corporates NOT Paying. Claiming inability to PAY. 2 lakh crores has been provided - when 10 lakh crores is required to fully provide for NPAs. And the Govt is Short of money. For its schemes. WHAT Do You Think the Govt Can Do ifvPUSH comes to Shove ? When BAIL IN is Legalised - & the Govt is Short of Funds for Recapitalisation of banks ?

3. Who Benefits ? Except Crony Capitalists & errant Bankers who hv bowed to political masters and been culpable by giving loans on Political support basis ? Unprofessionally - without proper Credit risk Assessment, without adequate Security or Diluted Security ?

Who LOSES ? Potentially. Depositors ! Not the Govt - if it refuses to Find the banks from Tax Payers Money. And from its Profits and Dividends as the Dominant Shareholder - Required to support its Banks and bring in funds !

4. The other Fraudulent Dilution is - making Banks Restructuring NOT Solely under the Banking Regulation Act - a specialised Act for Banking and Authority solely vested in RBI.

The Fraud - is Introducing also the Companies Act. Into this Bill.

Meaning - under the Banking Act the depositor cannot be treated as a Sundry Creditor...but has to be Repaid. Which is the Business of Banking. Based on TRUST !

Instead - now - as per this Act - the Depositor will NOT be treated as under the Bkg Reguln Act - but as a Sundry Creditor under the Companies Act. And treated like ANY Company.. unsecured depositor
Liable to Lose his Deposits.

This will create Grave Suspicions re. TRUST in Banking. Esp TRUST in Nationalised Banking ! Where Shares are HELD by the Govt itself !!

Is the Govt looking for a Way Out of Coughing Out money to Recapitalise Nationalised Banks ?

Else why change the legal Position - from Implicit Bailout TO Explicit BAIL IN ? Whenever it is convenient or necessary ?

This is very Damaging for Banking - which is based on Public TRUST. In Banks and in the Govts Intentions and LAWS. Not mere verbal Assurances .. but Written into LAW. Enshrined in protecting thru LAW our deposits ..by the Govt.

Not in the Way convoluted and indirect mentioned in this Draft FRDI Bill 2016 !!

Very Suspicious.
Very Worrying.

5. Why isn't a Quick Legal Bankruptcy Proceeding - FAST Track - against the MAIN Defaulting Corporates .. SEIZE their ASSETS and Companies - & Enforce ALL their Personal Guarantees. Whoever they are. Ambani, Adani, Jaypee, Unitech, Mallya, Bhushan Steel, Lagadapati Rajgopal of LANCO, ESSSR brothers - Ruia, Steel cos incl Mody Group, ALL WITH OVERDUEs and NPAs ALL the TOP 50 Defaulters Corporate. - to Recover Dues to Banks..

6. Some 14 Countries in G20 incl Australia - have NOT agreed or Ratified this BAIL IN into Law. Why should the Modi-Jaitley Sarkar expedite this or Push for it - and Not Question the wisdom of going in for Bail In. Why should it Not Challenge this Provision ? Stating this is NOT Suitable for India . And Refusing to Pass this Bail In Provision !!

After all - the Govtvsays - This was Agreed in G 20. WHY ? WHY without Public Consultation ? WHO authorise THIS ? WHO Agreed THIS ? And WHY ? Let us have some ANSWERS ..before we take this further !!

Have we Questioned the Motives + Intentions of those who asked for this ? In India. And Abroad !!

Foreign citizens asked that No More Tax Payers Public Money - be Used to BAIL OUT Private Banks ! Not Publicly Owned Govt Banks !!.


So BAIL IN was framed to solve PVT Banks Debt Problems - in USA + Europe. That was the Public's Demand. That was what was Required ! That was WHAT was NEEDED ! For private BANKS.

Not for Govt Banks !!

Now - these slick lawyers Draft a General BAIL IN for ALL BANKS ?

WHY ALL Banks ?
WHY NOT Only Private banks ?

The Intentions are Suspect. From those pushing this globally - and their Slaves in India - who bend over backwards to accommodate their foreign masters. ! That's the Truth !

WHY Sell OUT this Country ? Angle the Nationalised Banks in this Country.

This Indian Bill - a carbon Copy or Clone of a Foreign Bill needed by the western Banks - Pvt Banks !

It is NOT Suitable for Indian Nationalised Banks !! Owned by the Indian Govt !!

This is a BETRAYAL !
Of ALL Indians ..

By these Politicians

Question their Intentions and Motives.

Why are they following their Foreign Masters and Foreign supporters ?

7. If you research this deeply ..you will see the Modi Sarkar has been In BED with Foreign Billionaires and that DeMonetisation was a move dictated from these same Overseas interests - that are Pushing Aadhaar for linking everything.. to create a Surveillance State - to supporting Elimination of cash & replacement of Cash by Digital money - worldwide ! Using American FinTech - Financial Technology - with Backdoors to the NSA, CIA et al - the Deep State !

None of this Dilution of existing Nationalised Bank Govt Support .. is in the Indian National PUBLIC INTEREST !!

Our Laws are Weak ( see Vijay Mallya case), Our Courts are painfully geriatrically SLOW, our RBI today is a Mute Spectator - HMV - waiting for His Masters Voice - like acGramaphone Record.. the System is being Sbcerted from Within by these Political Rogues, Rascals, Scamsters, Lightweights, Ruffians and Bluff Masters !! Looting the System - from Within. We have given them the Keys to the Kingdom - and they are playing HAVOC.. in a Deliberate, Calculated manner - much like Mir Jaffar sold this country out in Plassey ..to the East India Co & the British !

Do NOT ALLOW this BAIL IN to Go THRU. Do NOT BELIEVE the Political Men of straw and Duplicity and Devious Deceit. Do NOT Give in to SOFT Assurances and Soft Words. Do NOT Give into Bluff Masters Bluff games ! Do NOT Give into Dhamki, Dhakka or Dhamaka from these people who support Corporate Cronyism..and BAIL INs

These are the Agendas from Overseas Globalists ! Meant to Slowly Erode your Rights, Liberties and Assurances.. over the years. To penetrate, weaken and ultimately gain control over this Financial system, Our Banks, our Economy - and our Lives..

If you want to know How and WHY these are being coerced ..read the links attached below - to learn these Foreign Agendas. The games they play, How they penetrate acCountey, their declared plans..and read widely on this ..it's all available thru the Internet ..you just have to know where to look..who to go to for insights, till you learn to discern the TRUTH buried in Overseas Agendas..

https://www.google.co.in/amp/s/www.globalresearch.ca/the-global-bankers-coup-bail-in-and-the-shadowy-financial-stability-board/5419698/amp

G20 2009 London onwards
Sovereignty being meddled with !

Ellen Brown - Global research bro BIS, FSB & its shadowy involvement (read meddling + interfering ) with matters of Sovereignty in Banking..

Frameworks are being THRUST on Us !

2. http://thebridgelifeinthemix.info/finance/hsbc-bis-expose-banking-cartel-action/#sthash.GbirmMlh.dpbs

3. http://www.corpwatch.org/article.php?id=16086

4. ZeroHedge on BIS - http://www.zerohedge.com/news/2015-04-11/meet-secretive-group-runs-world

5. Norbert Haering on Washington DeMo Linkages & history. US FinTech India major Guinea Pig to push this - US NSC & POTUS + NSA

Well kept secret Washington behind DeMo
https://www.google.co.in/amp/s/www.globalresearch.ca/a-well-kept-open-secret-washington-is-behind-indias-brutal-demonetization-project/5566167/amp

Team Modi and BTCA et al Gates, Omidyar, Soros, Citi, Visa, MasterCard FinTech et al US NSC POTUS

http://norberthaering.de/en/27-german/news/749-modi-2

Pot of Gold BCG - Not Financial Inclusion

http://norberthaering.de/en/32-english/news/765-pot-of-gold

How India became Bill Gates Guinea Pig. POTUS, NSA , US NSC Resolution featuring India FinTech as a National Security matter for USA..ie viz

The US Deep State - ie NSA, CIA etc US Administration linked to Aadhaar frenzy and madness ..As well as DeMo. Here's the Playbook. Step by Step. PL PUBLICISE IMP..ie viz..

The *Globalists BIG Corp - US National Security State - read NSA/CIA I..SCAM cum  Playbook*

http://p.feedblitz.com/r3.asp?l=132380075&f=939647&c=5492889&u=54305654

http://norberthaering.de/en/32-english/news/784-gates-india-demonetization

Catalyst's Malik Views on NH article

http://norberthaering.de/en/27-german/news/760-malick-demonetisation-india

Indian Ministers & CEOs Post DEMO in March 2017 flick to meet Digital Colonisers in Washington

http://norberthaering.de/en/32-english/news/792-mit-conference-digital-colonization

IMF Tells Govts How to Cope With and SUBVERT Public Resistance on these matters Digitalisation, DeMo etc..ie (Advice from Overseas Masters + String-Puller-Manipulators)

http://norberthaering.de/en/32-english/news/792-mit-conference-digital-colonization


6. Jim Rickards, Gerald Celente, to an extent Max Keiser,

7. Pension Fund crisis USA

https://www.ft.com/content/f2891b34-3705-11e7-99bd-13beb0903fa3

USD 3.85 Trillion hole. Annual Shortfall USD 434 billion

https://www.bloomberg.com/view/articles/2017-03-24/pension-crisis-too-big-for-markets-to-ignore

http://www.zerohedge.com/news/2017-05-24/six-terrifying-graphs-simplistically-summarize-americas-public-pension-crisis

Paul Craig Roberts on the global scene, banking, bail ins.. and predatory criminal acts ongoing ..by criminals Govts worldwide.. in collusion with Bankers, Businessmen, political crooks etc..

https://youtu.be/Qcdp2sJBNRk
________________________________

PRANAV DAMANIA

1 year ago

I don't think Government will introduce bill as it is since this will have a negative political effect

V.Krishnamoorthy

1 year ago

How many notifications, clarifications to confuse the people for the past over one year. If the Govt. feels that they are governing only cheats and crooked, it is the last step of the democracy. The govt. need not put so many Aadhars for the ordy. people who earns and put some many for his rainy day after spending for his needs and paying taxes. all types of restrictions can be placed for those who deal in foreign exchange or over a limit. If the entire nation is put on suspicion, I am at a loss to know how the people will have faith in the government.
People should note that savings account deposits, term deposits, current accounts are all unsecured liabilities for the banks and upto one lac it covered by deposit insurance corporation. If that point is not clearly told to the people the media and parties will make comments and confuse. As the banks own major shareholding it is the guardian angel for all our money placed at its care which they spend at their free will. Once their share holding is sold to the public and it becomes a minority shareholder people will understand their status.. until it is in the present position, and if it fails, it will be another SAHARA case.

RanjitK

1 year ago

In all this Confusion - let me make a few things Crystal CLEAR.

1. Present situation is - Govt Bail OUT (& Govt Support) is IMPLICIT ..in all Indian Banking ! That is the Position TODAY.

The Bill, if passed - will Make BAIL IN Legal.

So Substitution of IMPLICIT BAIL OUT by Govt .. BY BAIL IN by DEPOSITORS ..becomes a possibility.

THAT is a RETROGRADE STEP - Dangerous for Depositors. Esp when 65% to 85% Deposits are with Govt Banks.

2. The BAD Loans are due to Corporates NOT Paying. Claiming inability to PAY. 2 lakh crores has been provided - when 10 lakh crores is required to fully provide for NPAs. And the Govt is Short of money. For its schemes. WHAT Do You Think the Govt Can Do ifvPUSH comes to Shove ? When BAIL IN is Legalised - & the Govt is Short of Funds for Recapitalisation of banks ?

3. Who Benefits ? Except Crony Capitalists & errant Bankers who hv bowed to political masters and been culpable by giving loans on Political support basis ? Unprofessionally - without proper Credit risk Assessment, without adequate Security or Diluted Security ?

Who LOSES ? Potentially. Depositors ! Not the Govt - if it refuses to Find the banks from Tax Payers Money. And from its Profits and Dividends as the Dominant Shareholder - Required to support its Banks and bring in funds !

4. The other Fraudulent Dilution is - making Banks Restructuring NOT Solely under the Banking Regulation Act - a specialised Act for Banking and Authority solely vested in RBI.

The Fraud - is Introducing also the Companies Act. Into this Bill.

Meaning - under the Banking Act the depositor cannot be treated as a Sundry Creditor...but has to be Repaid. Which is the Business of Banking. Based on TRUST !

Instead - now - as per this Act - the Depositor will NOT be treated as under the Bkg Reguln Act - but as a Sundry Creditor under the Companies Act. And treated like ANY Company.. unsecured depositor
Liable to Lose his Deposits.

This will create Grave Suspicions re. TRUST in Banking. Esp TRUST in Nationalised Banking ! Where Shares are HELD by the Govt itself !!

Is the Govt looking for a Way Out of Coughing Out money to Recapitalise Nationalised Banks ?

Else why change the legal Position - from Implicit Bailout TO Explicit BAIL IN ? Whenever it is convenient or necessary ?

This is very Damaging for Banking - which is based on Public TRUST. In Banks and in the Govts Intentions and LAWS. Not mere verbal Assurances .. but Written into LAW. Enshrined in protecting thru LAW our deposits ..by the Govt.

Not in the Way convoluted and indirect mentioned in this Draft FRDI Bill 2016 !!

Very Suspicious.
Very Worrying.

5. Why isn't a Quick Legal Bankruptcy Proceeding - FAST Track - against the MAIN Defaulting Corporates .. SEIZE their ASSETS and Companies - & Enforce ALL their Personal Guarantees. Whoever they are. Ambani, Adani, Jaypee, Unitech, Mallya, Bhushan Steel, Lagadapati Rajgopal of LANCO, ESSSR brothers - Ruia, Steel cos incl Mody Group, ALL WITH OVERDUEs and NPAs ALL the TOP 50 Defaulters Corporate. - to Recover Dues to Banks..

6. Some 14 Countries in G20 incl Australia - have NOT agreed or Ratified this BAIL IN into Law. Why should the Modi-Jaitley Sarkar expedite this or Push for it - and Not Question the wisdom of going in for Bail In. Why should it Not Challenge this Provision ? Stating this is NOT Suitable for India . And Refusing to Pass this Bail In Provision !!

After all - the Govtvsays - This was Agreed in G 20. WHY ? WHY without Public Consultation ? WHO authorise THIS ? WHO Agreed THIS ? And WHY ? Let us have some ANSWERS ..before we take this further !!

Have we Questioned the Motives + Intentions of those who asked for this ? In India. And Abroad !!

Foreign citizens asked that No More Tax Payers Public Money - be Used to BAIL OUT Private Banks ! Not Publicly Owned Govt Banks !!.


So BAIL IN was framed to solve PVT Banks Debt Problems - in USA + Europe. That was the Public's Demand. That was what was Required ! That was WHAT was NEEDED ! For private BANKS.

Not for Govt Banks !!

Now - these slick lawyers Draft a General BAIL IN for ALL BANKS ?

WHY ALL Banks ?
WHY NOT Only Private banks ?

The Intentions are Suspect. From those pushing this globally - and their Slaves in India - who bend over backwards to accommodate their foreign masters. ! That's the Truth !

WHY Sell OUT this Country ? Angle the Nationalised Banks in this Country.

This Indian Bill - a carbon Copy or Clone of a Foreign Bill needed by the western Banks - Pvt Banks !

It is NOT Suitable for Indian Nationalised Banks !! Owned by the Indian Govt !!

This is a BETRAYAL !
Of ALL Indians ..

By these Politicians

Question their Intentions and Motives.

Why are they following their Foreign Masters and Foreign supporters ?

7. If you research this deeply ..you will see the Modi Sarkar has been In BED with Foreign Billionaires and that DeMonetisation was a move dictated from these same Overseas interests - that are Pushing Aadhaar for linking everything.. to create a Surveillance State - to supporting Elimination of cash & replacement of Cash by Digital money - worldwide ! Using American FinTech - Financial Technology - with Backdoors to the NSA, CIA et al - the Deep State !

None of this Dilution of existing Nationalised Bank Govt Support .. is in the Indian National PUBLIC INTEREST !!

Our Laws are Weak ( see Vijay Mallya case), Our Courts are painfully geriatrically SLOW, our RBI today is a Mute Spectator - HMV - waiting for His Masters Voice - like acGramaphone Record.. the System is being Sbcerted from Within by these Political Rogues, Rascals, Scamsters, Lightweights, Ruffians and Bluff Masters !! Looting the System - from Within. We have given them the Keys to the Kingdom - and they are playing HAVOC.. in a Deliberate, Calculated manner - much like Mir Jaffar sold this country out in Plassey ..to the East India Co & the British !

Do NOT ALLOW this BAIL IN to Go THRU. Do NOT BELIEVE the Political Men of straw and Duplicity and Devious Deceit. Do NOT Give in to SOFT Assurances and Soft Words. Do NOT Give into Bluff Masters Bluff games ! Do NOT Give into Dhamki, Dhakka or Dhamaka from these people who support Corporate Cronyism..and BAIL INs

These are the Agendas from Overseas Globalists ! Meant to Slowly Erode your Rights, Liberties and Assurances.. over the years. To penetrate, weaken and ultimately gain control over this Financial system, Our Banks, our Economy - and our Lives..

If you want to know How and WHY these are being coerced ..read the links attached below - to learn these Foreign Agendas. The games they play, How they penetrate acCountey, their declared plans..and read widely on this ..it's all available thru the Internet ..you just have to know where to look..who to go to for insights, till you learn to discern the TRUTH buried in Overseas Agendas..

https://www.google.co.in/amp/s/www.globalresearch.ca/the-global-bankers-coup-bail-in-and-the-shadowy-financial-stability-board/5419698/amp

G20 2009 London onwards
Sovereignty being meddled with !

Ellen Brown - Global research bro BIS, FSB & its shadowy involvement (read meddling + interfering ) with matters of Sovereignty in Banking..

Frameworks are being THRUST on Us !

2. http://thebridgelifeinthemix.info/finance/hsbc-bis-expose-banking-cartel-action/#sthash.GbirmMlh.dpbs

3. http://www.corpwatch.org/article.php?id=16086

4. ZeroHedge on BIS - http://www.zerohedge.com/news/2015-04-11/meet-secretive-group-runs-world

5. Norbert Haering on Washington DeMo Linkages & history. US FinTech India major Guinea Pig to push this - US NSC & POTUS + NSA

Well kept secret Washington behind DeMo
https://www.google.co.in/amp/s/www.globalresearch.ca/a-well-kept-open-secret-washington-is-behind-indias-brutal-demonetization-project/5566167/amp

Team Modi and BTCA et al Gates, Omidyar, Soros, Citi, Visa, MasterCard FinTech et al US NSC POTUS

http://norberthaering.de/en/27-german/news/749-modi-2

Pot of Gold BCG - Not Financial Inclusion

http://norberthaering.de/en/32-english/news/765-pot-of-gold

How India became Bill Gates Guinea Pig. POTUS, NSA , US NSC Resolution featuring India FinTech as a National Security matter for USA..ie viz

The US Deep State - ie NSA, CIA etc US Administration linked to Aadhaar frenzy and madness ..As well as DeMo. Here's the Playbook. Step by Step. PL PUBLICISE IMP..ie viz..

The *Globalists BIG Corp - US National Security State - read NSA/CIA I..SCAM cum  Playbook*

http://p.feedblitz.com/r3.asp?l=132380075&f=939647&c=5492889&u=54305654

http://norberthaering.de/en/32-english/news/784-gates-india-demonetization

Catalyst's Malik Views on NH article

http://norberthaering.de/en/27-german/news/760-malick-demonetisation-india

Indian Ministers & CEOs Post DEMO in March 2017 flick to meet Digital Colonisers in Washington

http://norberthaering.de/en/32-english/news/792-mit-conference-digital-colonization

IMF Tells Govts How to Cope With and SUBVERT Public Resistance on these matters Digitalisation, DeMo etc..ie (Advice from Overseas Masters + String-Puller-Manipulators)

http://norberthaering.de/en/32-english/news/792-mit-conference-digital-colonization


6. Jim Rickards, Gerald Celente, to an extent Max Keiser,

7. Pension Fund crisis USA

https://www.ft.com/content/f2891b34-3705-11e7-99bd-13beb0903fa3

USD 3.85 Trillion hole. Annual Shortfall USD 434 billion

https://www.bloomberg.com/view/articles/2017-03-24/pension-crisis-too-big-for-markets-to-ignore

http://www.zerohedge.com/news/2017-05-24/six-terrifying-graphs-simplistically-summarize-americas-public-pension-crisis

Paul Craig Roberts on the global scene, banking, bail ins.. and predatory criminal acts ongoing ..by criminals Govts worldwide.. in collusion with Bankers, Businessmen, political crooks etc..

https://youtu.be/Qcdp2sJBNRk
________________________________

Kasibhatta Srinivas

1 year ago

Modiji,
first think of big bulls like Albania, Adani etc. how they are getting so much revenue as curtains in their houses. It is being expected from you that loss to public will not be done. But in reality you are putting hands on heads of middle-class to show PATAL loka to them. At the same time you are worrying of big bulls for their survival. For that you appointed their PET Mr.UrgitPatel as RNI governor. A PET will never fires on his owner though wrong is owners. So open your eyes.

Ralph Rau

1 year ago

Is the solution to move money into crypto-currency which resides out of the reach of government ?

REPLY

Ch.Raghu Sampath

In Reply to Ralph Rau 1 year ago

If we lose or unable to withdraw money we can ask government here, but in case of crypto currency whom do u ask? . One thing is the article itself is a nobrain as their own thoughts are being written, but still government did not give any clear picture of what they will do. Let the government come out with a plan , then people should write the articles.

Shyam Sundar Madhavdas

1 year ago

If this bill becomes a reality what would be the difference between banks and non banking financial institutions like the Chit Funds? Will not Banks to become cheat fund organizations? Looks like after DeMo of currency it is going to be DeMo of deposits

Harikrishna V

1 year ago

This bill is applicable for all financial institutions in India. So, why run to private banks? There are also under this bill.

Further, even if this bill is not passed, there will be no benefit for the customer. Because, currently there is an insurance of upto 1 lakh , if a bank fails. That is, if my ₹1 crore is lost, I will get only 1 lakh as compensation.
So, whether this bill is passed or not, our money will be lost,given the bank fails.
So, the only solution is to deposit in a stable bank that is difficult to fail in the near future.

REPLY

AK M

In Reply to Harikrishna V 1 year ago

then why bring this bill now to create panic in the masses

Harikrishna V

In Reply to AK M 1 year ago

This bill tries ensure that no financial institution fail by taking control of the institution that may fail. Some media makes the panic

Inder Kumar

1 year ago

With interest rates already low and unrecovery of loans depositing money in banks will become risky plus with no t much liability to pay customers PSB will become more irresponsible with loans and distribute the money like it is there father's maal and to hell with customers.

Ramesh Poapt

1 year ago

I hope after the fine prints of the bill are out, Moneylife will take up the
issue strongly.

Khaja Reddy

1 year ago

We are welcoming the very good reform to strengthen the back bone of Indian economy that is banking system from TBS

Ramesh I

1 year ago

Just like the disastrous demonetization exercise unleashed by PM Modi on hapless Indians in November 2016, this FRDI Bill is bad in principle and will further erode people's faith in our Banking system. As it is, the Govt uses taxpayers' money to recapitalize perennially loss-making PSUs and PSBs, and with this FRDI Bill, it will give one more 'easier' option for the Banks to use depositors' money to sustain itself. So, as in current scenario, the PSBs will have no additional burden of turning profitable in the FRDI regime. As stated in the article, sensible depositors will move their money to private Banks, who won't have to bear the 'burden' of Govt largesse, such as loan disbursals to farming and MSME segment (often without adequate collateral), mass loan waivers as done for farmers in UP and Maharashtra recently, and such fiscally imprudent policies of the Govt. Instead, the Govt should have come up with a Bill which would give greater autonomy to PSBs, giving them freedom to offer loans and recover them, and also stop interfering in the loan disbursals to big businesses (the Vijay Mallyas). That would be sensible. Beyond all this, wonder who powerful Employee Unions of PSBs will react to FRDI Bill, as it will probably see flight of funds from PSBs to private Banks promptly.

S K Rai

1 year ago

The minister at the helm of financial affairs has gone berserk. Let such financial institutions, as public sector banks, insurance companies and others become bankrupt and perish rather than survive, with lavish salaries and other fringe benefits, on hard earned money of innocent depositors. If at all they are to survive, let all the ministers, MPs, MLAs and other gubernatorial parasites give up all their salaries, perks and luxurious benefits for the sake of it.

Bitcoin: Tread with caution
George Soros, the legendary hedge manager, once said that in the financial markets, it doesnt matter whether one is right or wrong: What matters is how much money one makes when right and how much one loses when wrong.
 
Investors who managed to catch Bitcoin early look like geniuses and those calling for a crash within a short time frame will also look like market gurus if they profit from its downfall.
 
The attention of retail investors usually comes at extreme price points -- either when Bitcoin is making new highs or there is a very deep correction.
 
At this juncture, first time investors in the cryto currency space should not jump right in. There are many indicators that a big correction can occur over the next few weeks.
 
Up until now, Bitcoin has been a one directional bet. Market participants have not been able to express their bearish view on the cryptocurrency by taking short positions. Thus, every correction on its parabolic rise up was only a function of investors booking profits. However, from December 11, Bitcoin futures have been launched on major exchanges in the US, including the Chicago Mercantile Exchange, which would give financial institutions an opportunity to be net short Bitcoin futures. This would imply a much fairer and a more efficient pricing mechanism. Remember, the Tulip bubble burst after the Dutch Government introduces Tulip futures.
 
Why does Bitcoin seem like a unique bubble? 
 
When we speak of bubbles -- be it the Tulip bubble, the South Sea bubble, the Mississippi bubble, the Silver bubble of the 1980s, the Nikkei bubble of the late 1980s, the Dotcom bubble of the 1990s, the Housing bubble of the mid-2000s as well the most recent gold rush of 2011-2013 -- they all display similar characteristics when it comes to the excessive ownership of the underlying asset as well the exponential price movement. Further, during the bubble, although certain valuation metrics may be in place to measure the intrinsic value of the asset, it is usually the subjective value investors put on the asset which dictates the market price. 
 
For example, if North Korea were to actually launch a nuclear warhead tomorrow, there would be no reason for a non-yielding asset like gold to be trading at $1,600 per ounce. Similarly, if real interest rates globally were to rise in an unexpected manner in a very short time, there is nothing to stop gold trading below its cost of production. One cannot reason these prices at such times. But such price levels are almost always never sustainable and revert to logical price bands.
 
Bitcoin has no pricing model. Conventionally speaking it's a non productive asset. 
 
Bitcoin miners are annually using the electricity consumption equivalent to that of Nigeria. Their costs are likely to increase and by some estimates, the cost (electricity) of mining per year would be the annual electricity consumption of Japan over the next few years. This is why most miners are based of out Iceland where cooling costs for their servers are low while others are based in China where electricity is being subsidised. Clearly, from the energy consumption perspective, the cost of mining a bitcoin at present seems unsustainable. 
 
In terms of participation or ownership of the asset, the Bitcoin phenomenon seems to have more frenzy than most recent financial bubbles. People who have never invested in a stock, bond or real estate suddenly want to own Bitcoin. The most popular topic at many social gatherings is: "Which crypto is the next bitcoin?" 
 
One of the biggest risks with the Bitcoin and crypto currencies is the legal and regulatory risk. The beauty about bubbles is that during the bubble, many policy makers and observers do see clear signs of frenzy and irrational exuberance. But it is usually the market itself which bursts the bubble and not the government. This is simply because when you burst a bubble prematurely, there is a high possibility of bursting a lot of "non-bubbles" which may hurt the real economy. However, with crypto currencies this is not the case. If the US Federal Reserve were to simply say that ownership of a Bitcoin is illegal and declare it worthless (or even fix a price for it as it is essentially priced in US dollars), the price would come tumbling down. 
 
Bitcoin and other crypto currencies have never been through a financial crisis. One cannot be certain that the crypto asset class is completely non-correlated from the financial system. Thus, comparisons between gold and bitcoin are unjustifiable and it should not be commanding any "safe haven" premium currently. 
 
What seems certain is that the technology underlying Bitcoin -- Blockchain -- is here to stay and will be more dominant in the future across industries from healthcare to retail. Further, investors should also study the likes of Ethereum and Ripple. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Kasibhatta Srinivas

1 year ago

The heads like Jaitely,& finance secretaries ( All are IAS)
Last year you implemented democratization. None of you stood in lines for exchanging or came to banks. But all your currency was converted in to white. How? It's your game. Now you are bringing FRDI bill. What is its necessary? If a person wants take a loan from bank he has to some guarantee of asset against it. Then only loan will be pursued. Then how come so many thousands of crores loan will be sanctioned with out any guarantee of asset? That is the mistake of bankers and politicians and for your idiotic & irresponsible works you are asking public to support. It is shame on both IAS & politicians part. First you people change your attitude. Stop giving slogans like all are equal in sanctioning loans , all are equal before law. One idiot with his loose tongue commented on BSF.He is MP.Why I mentioned means the politicians are creatures. They don't have bones. They never stood on one word. Our earliest told human came from monkeys. Our politicians are proving it. I am requesting IAS that an IAS can become a minister in life but a minister can't become an IAS in this life. So please respect wisdom along with education & then make policies. You can observe there are MG ROADS, NEHRU PARKS etc but there is no value to any politician after 2000.

Fake 2,000-rupee note was out within 53 days of demonetisation!
 It didn't take long for fake notes of 2,000 rupees to start circulating after Prime Minister Narendra Modi announced demonetisation in November 2016, with one of its stated aims being to kill counterfeit currency, official data show.
 
According to the National Crime Records Bureau's (NCRB) latest report released on November 30, a total of 2,272 fake notes of Rs 2,000 denomination were seized in 2016. Since the Rs 2,000 note -- along with the new Rs 500 currency -- was introduced only after November 8, 2016, it means that those counterfeiting the notes got into the act very quickly.
 
In just 53 days between November 8 and December 31 last year, police and other government agencies seized 2,272 fake Rs 2,000 notes -- at a time when people across the country were struggling to get hold of the new currency.
 
The maximum number of these Rs 2,000 fake notes were seized in Gujarat (1,300), followed by Punjab (548), Karnataka (254), Telangana (114), Maharashtra (27), Madhya Pradesh (8), Rajasthan (6) and Andhra Pradesh, Arunachal Pradesh and Haryana (3 each). Jammu and Kashmir and Kerala accounted for two fake notes each. One such note was seized in Manipur as well as in Odisha.
 
The Rs 2,000 notes were part of the 281,839 fake notes of various denominations recovered from different locations across India.
 
When Modi announced the note ban, he said it was being done to end black money, counter terror financing and do away with counterfeit currency.
 
Among other fakes, 82,494 notes of Rs 1,000 and 132,227 of Rs 500 denomination were also seized last year along with 59,713 notes of Rs 100 and 2,137 notes of Rs 50, said the annual publication of NCRB released by Union Home Minister Rajnath Singh.
 
In a number of raids across the country, police forces, the Income Tax department and other government agencies also recovered 184 fake notes of Rs 20, at least 615 notes and coins of Rs 10 and 2,001 notes of Rs 5.
 
Also seized were 196 fake coins of Rupee 1 denomination -- between January to December 31 last year.
 
According to the data, the face value of the total fake notes found in 2016 is Rs 101,222,821.
 
In terms of value of maximum fake notes, Delhi (Rs 56,521,460) topped the list.
 
The national capital was followed by Gujarat (Rs 23,724,050), West Bengal (Rs 23,295,800), Andhra Pradesh (Rs 9,280,000), Karnataka (Rs 8,009,136), Telangana (Rs 7,600,905), Uttar Pradesh (Rs 5,013,700), Maharashtra (Rs 4,799,700), Punjab (Rs 4,239,750), Bihar (Rs 3,736,800), Tamil Nadu (Rs 3,342,540), Kerala (Rs 2,057,200), Madhya Pradesh (Rs 1,626,890), Chandigarh (Rs 1,499,000), Rajasthan (1,035,100), Assam (Rs 800,050), Jharkhand (Rs 706,000) and Uttarakhand (Rs 666,400).
 
At 114,751, Delhi also topped the chart in terms of maximum seizure of fake notes, followed by Gujarat (39,725), West Bengal (32,869), Andhra Pradesh (14,541), Karnataka (14,228) and Telangana (12,667).
 
Among all the states and union territories, Goa accounted for just 21 fake notes having a face value of Rs 17,000.
 
No fake note was recovered from Chhattisgarh, Sikkim, Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu as well as Lakshadweep, the NCRB data says. 
 
The data said a total of 1,172 FIRs were registered and 1,107 people arrested for their involvement in the illegal trade.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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COMMENTS

Dr Anantha K Ramdas

1 year ago

There is no doubt in my mind that the demonetization of high value notes was a grand move to eradicate the evil of black money and increase the taxable income which was ruining the economy. However, the biggest stumbling block in this whole exercise is that it was not fully organized to support the system by having protective currency in lieu. The most ideal situation would have been the simultaneous introduction of polymer currency notes, pioneered by Australia, almost 30 years now, and it is most difficult to counterfeit these notes. More than 30 countries have switched over to polymer currency notes and even United Kingdom has just about started this switch over to eradicate the evils of counterfeit currency.

There is no reason why India cannot follow suit?

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