New study underlines with data disaster of PSU banks, makes case for privatisation
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- Опубліковано 18 лип 2022
- On 53 years of bank nationalisation, Shekhar Gupta in episode 1038 of Cut The Clutter looks at a new study with data on performance of the Public Sector Banks over the years & what might possibly be India's banking disaster. The NCAER Paper makes a case for privatisation.
Brought to you by @KiaInd
Read the paper here: www.ncaer.org
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When will SG learn to show tables and graphs properly allowing viewers to have time to digest the numbers. Less of his face, more of the slides please.
I am do not understand it what speak🗣 because I am deaf but request must english sentence 🥺🥺😞
As I work in a PSB, let me be the devils' advocate, when one enter HDFC, which type of customer one see, the top 5-10% of any city, my own account is with HDFC, but with PSBs the bottommost 40-50% of the area.
I am all for privatisation and there's too much documentation in PSBs but the privatisation which govt is doing isn't holistic one- what I meant by it that even after privatisation BABUs still calls the shot, that's why credit wrt GDP is poor, PSBs can be world class but due to BABUs at the top and "save your ass" Culture, people are not incetivised to take risk, I don't wanna risk my career over some loan which if gone bad, ED, CBI will knock my doors and not even my own bank will protect me.
Create a society away from BABUDOM and incentivise people to work harder and give them protection too in certain cases, then our banking system will be world class
Till then, Private Bank like YES BANK, nbfcs like ILFS will go bust and taxpayer money will go to hide the incompetencies of babus
agreed. risk aversion is common not only in ps banks but also in PSUs like ongc and even in important companies like DRDO ,HAL and ISRO. Assertiveness and innovation is not rewarded in indian govt owned companies which makes the case for privatisation.
Looks good theoretically , but ain't possible practically
True brother.
These so called data interpreters will only see the data as per privileged class people...
Data never shows ground level picture.
Only a bank employee knows what happens in banking sector
Risk taking can be encouraged by providing government deposit insurance. In the US, all amounts deposited in any private bank are insured up to $250,000. The benefit of this is that people will deposit their money in banks without having to worry about solvency of a bank.
Public Sector is filled with rent seeking culture. Paperwork is made for the babu to micromanage and elicit favors and bribes
Very illuminating presentation. Many thanks.
NPA in Indian banks going up from 1.8% to 7.9% is because of hiding the NPAs as good recoverable lendings. During the middle of last decade, the banks were forced to make provision for such NPAs and come clean. That 7.9% is the disclosure of past sins.
Hi Gururaj,
Thanks for tuning in!
Agree. A large portion of the NPAs pre 2015 were hidden as Standard restructured assets. SRA started coming down when those assets were correctly classified as NPA, which is when NPAs were correctly reported
Then tell me, why govt give no rights to banks for recovering NPAs, instead every timr there is NPA, loan defaulter gets Haircut.see cases of videocon, rotomac etc. PSU Banking is a beast without teeth
Yes Bank was a private bank. Also Global Trust Bank and many more. We knoe how they rescued and by whom. Narendra modi is spending 900 crore for advettisement. Is it not tax payers money? No regret? When PSBs are not there we can see the real situation. Why private banks are not in front for PMJDY and mudra loans? Why Govt is promoting such things through PSBs?
Another myth
To all the people who are against privatisation, loads of your (tax payers) money is going into recapitalisation of these banks, which could otherwise be used for better purposes. Stop and think for a moment. As a tax payer, I would not like to see my hard earned money being wasted on some money loosing organisation. Better to sell it off and cut loses.
You are right about that, but we have to see why they are losing
We don't need all these psb's that's an obvious thing, but we need govt controlled banks because we still have a lot of our population out of banking especially poor people who are taken advantage of by money lenders.
Penetrating to this can only done by psb's.
Most PSB s are in profit now and some good governance like sbi can make them a wonderful addition to our economy
In USA also Tax payer's money was used to bailout Banks in 2008.
Majority of of PSB are used as financial policy conduits by the govt, any loan shceme for the poor or the farmes or even for the MSME sector is sanctioned through PSBs. majority of loans never come back because govt allows these laons to be collateral free. No pvt bank in their right mind would do this even govt banks dont want to do this but the finance ministry forces PSBs to do this.
Shekhar doesn't mention that its the govt banks that have rural branches or branches in difficult areas where there is no income but these banks operate because they are there to provide service and because no pvt bank will ever open offices in these areas. Taxpayers money is also used to bail out private banks. Yes bank we rescued by SBI dont forget that. Even IDBI was rescued by LIC. Lastly, if for once the finance ministry stops arm-twisting these banks they will be profitable. It's the horrible free loan policies that ministers keep making that put these banks into this position. Making better laws and allowing the management to be indipendent in their decision-making will instantly solve majority of the problems of PSBs.
Says a failed ibps candidate
Instead of finding solutions, the better option is to sell them off. Chinese are doing pretty good where all financial institutions are controlled by govt. Privatisation isn't bad but, is these banks being privatised fairly. If they have to sell most probably these will go to ambani or adani for discounted price. After Privatisation do anyone want to hold their deposits in a bad bank.
I like SG more when he speaks on economic topics, much better then any economist in his analysis and clarity of thought.
Well said
You like opinionated videos from a non practicing low informed journalist
Figures for yet another layman who loves getting swindled that too unknowingly
So much more interesting and useful than endless rants on politics.
Hi Rajan,
We appreciate you writing in with your feedback.
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Yes bank, dhanlakshmi bank,PMC bank,deewan housing finance, iifl finance etc
All are private financial institutions still failed
Banking business is loaded with high amount of risk in countries with low GDP per capita combined with democracy
China and Vietnam have high credit to GDP ratio because of their iron fist governance structure
In India you need to beg ( acc to rbi guidelines) for your loan recovery
Courts are so slow that a simple bounce check case takes average 3 years to settle
Unless you improve your governance and judicial system there won't be any benefit of privatisation of PSB
Most of these privatised PSB would go bust within a decade
True
Privatising all PSBs only means you are running from your responsibilities...
One more thing
In china and Vietnam most of their banks are public sector banks
@@shivanikhanduri318
Banking and defence are the few sectors which i feel the govt should be involved heavily.
@@shivanikhanduri318 it's more about mindset
"Privatisation is pill to cure everything "
You hit the nail on the head. Nothing will change in this country with colonial bureaucracy and colonial court system.
SBI shouldn't be compared with other commercial banks, public or private. For historical reasons, from the time of Imperial Bank of India, it enjoys certain Government business which allows it to be more profitable. But your overall point is correct: Communists and Congress have no clue the money taxpayers are losing to support the PSUs.
I agree on the last point.... Modi and Adani have a better idea....and they laugh at private meetings.... 🤔
That clinches the argument
Let's put things in perspective. Govt has spent $40 billion dollars to recapitalize Public Sector Banks. That's $40 billion that you can't use to fund other priority issues.
For $40 billion,
- You can double the output of Nal Se Jal (It costs $60 Billion/yr)
- Double the Capital expenditure of the Armed forces. Programs like MRFA/AMCA/Aircraft carrier/Light tanks etc. would get better funding
- Salaries of Teachers in almost every state can be doubled with leftover money used for pensions
- 15 more Metro lines in our Cities
- Roughly 60 new expressways.
Any one of those programs could have given better returns over recapitalization of PSBs.
Yes everything will be doubled and peoples deposits will vanish and peanuts will be given by depository insurance🤣🤣🤣 And Adani will purchase the liquidated assets again by taking loans from some other bank and the cycle continues..The great Indian loot 😂😂🤣🤣🤣
@@deepakranjan4844 $40 billion would have tripled deposit insurance.
There are far more effective ways to use $40 billion. Recapitalization is the best way to waste $40 billion.
@@deepakranjan4844 the thing is adani s life is more valuable than yours not because he is rich but you are worthless as shown by your brain dead comment
Recapitalization needed because of the Govt. previous moves like forcing these banks to takeover failed private sector banks like Yes Bank. If the Govt. is for privatization, they should learn to handle private bank bankruptcies on their own instead of using PS Banks as if it is their fault. If they publish the list of largest NPAs for each PS Bank, most of them would be private companies. There is no efficient mechanism to handle such cases for Govt. than forcing the banks to write off those loans.
@@libshastra your feku Govt phucked economy unemployment incompetent
Nationalising everything would be an economic disaster and privatising everything would be a management disaster. Putting the country at the mercy of the people or putting the country at the mercy of some businessmen would certainly be catastrophic either way. We should be picking the correct sectors to nationalise or privatise. The current discourse sucks as it is just about whether privatisation is good or bad.
Privatising doesn't mean divesting government assets to big industrialists. In a free and fair market, if a few businesses cannot cater to a market, a few others will occupy the space. Privatising everything is by no means a management disaster. Our independent institutions RBI, ministries etc. are capable like every other country to formulate policy's for an open market. There is NO benefit of the governments to run these institutions. Disinvest and auction these assets, let private players take the baton from here on.
@@prasvasu4217 💯
Modi is the Most Incompetent PM since independence. He has no ability to turnaround any enterprise, thus the easy option of giving it away for a song. He's just a puppet in the hands of corporates who finance his elections. And he's mastered the art of divide and rule thus the crusade against Muslims to polarize innocent Hindu votes. Public sector banks and the parallel economy saved us during the sub prime crisis.
@@prasvasu4217 Look at the telecom industry. It is a management disaster. One company came in, other companies had to scramble for market share. Almost all companies are broke. Jio has asked for a debt waiver as there's almost no money to build new infra other than selling their own stock. How is this different from running a loss making government organisation? India should build its own infra while taking suggestions from the private players and then lease it. I think India should own all the infra in every sector but some sectors can be managed by leasing it off and some sectors can be managed by the government itself. I used the telecom example because it is good to privatise that sector but we have still ended up badly and similar to a loss making government organisation.
@@lifeisoof Banks are different from telecom. There's a reason why the telecom sector is an oligopoly, its extremely capital/asset heavy and hence requires big backers. Also coverage is subject to areas. If you travel to tier 2 cities or below or even rural areas, you can find one small bank in every corner. Ofc, they have to be subjected to strict regulatory norms required for operating as they're banks but that's a different can of worms. If these assets are sold out for cheap, lot of the benefits possibly could find ways to trickle downward to our poor; that's an added advantage. And speaking of telecom, the government in itself is selling BSNL assets. And that's in spite of burning tax payer money all these years and the fact that they were a dominant player in 90s and early 00's.
4:44 The graph that goes down after 2015-16 is the primary reason for slowdown in economic GDP growth and credit in India. That slowdown is often attributed to demonetization by some out of ignorance.
It can also be due to all the hidden NPAs disclosure after the mandatory Asset Quality review in 2015.
Demonetisation actually destroyed Indian informal sector and private consumption started collapsing after that year after year. Now we are slower than even hindu rate of growth 🤣🤣🤣
@@RahulKumar-ng2gh Well, that what's the graph indicates. The 2015-16 was the time when RBI decided to take NPA crisis head-on and compelled public disclosure of NPA accounts subsequently Govt bringing the IBC in 2016 to resolve the crisis.
@@animesh_tiwary but completely ignoring the ill effects of demonetization is stupidity.
Well Said Mr. Gupta, " Wherever Government gets into any business that business that business is doomed"
The basic reason for the same is Government has the test of Elections and successful business depend on correct Selection by Management 👍
Well said. Your deposit going into private risky hands is ok for you. Kindly handover your other asset classes like land and gold also to private sector. Government will soon bring laws to privatise land and gold but yes they will cut your losses by giving you land and gold insurance and rest you can get after liquidation of the company who will keep your land and gold as done by banks who keep our deposits..🤣🤣
@@deepakranjan4844 You make no sense sir, just to point out in case you are no aware.
Police department should be privatised then
@@samrat.Biswas 💯
@@offred6013 police dept is not business but banks are.
Banks should be privatized but systematically. It is inveitable looking at current situation of Public sector banks in India but it should be done systematically not in sake to simply gain revenue for GOI when economy is in complete mess since demonetization. Let's hope the think tank sitting in Delhi does this reform in a way which brings & delivers the best outcome for India.
I donot know how demonitization still affect the economy
No more big bangs - slow incremental reforms please
@@dellhp9564 stop reading whatsapp university sources
@@dellhp9564 i dont know how stupid r u ?
@@Avinashm7 I don't know people like you but demonitisation effect tends to down after two years in form of digitalisation and digital economy. Things could have great if pandemic doesn't hit the world.
Have you ever heard about the social impact of PSBs? How many rural branches have private sector opened compared to PSBs? The success of DBT to the most deprived - specially in time of pandemic - was because the reach of the public sector banks.
He is just a puppet who got some bucks to told like a tota!
Don't take him too seriously
i had last year opportunity to open my first account. first one was opened ar SBI within 2 months i moved to HDFC both rural branches. i am ready to keep 2500 minimum balance and get better sercivec.
Only district HQs have PvT banks in rural areas
@@deepakshandilya5528 yes district HQ isn't that far. Is around 10km. So is public sector banks for many there isn't SBI on every corner
@@himanshugoswami6843 not in every district, also the term rural branch is twisted by many banks for their ease, they mark a suburb as rural(since 25 yrs ago it could have been designated so) to show that they have enough rural branches, also, a rural branch located in rural Gujarat Maharashtra or Kerala is much different fr let's say chhatisgarh bihar or jharkhand, many get away by opening bulk of rural branches in the more developed States. The concept of lead bank has hindered the growth of PSBs, apart from their there is lot of interference fr district administration & GOI, which isn't the case with pvt ones, if the GOI wants to go ahead with privatization then it's fine, just finetune the deal while take care of present employees (like pay protection etc) & go ahead, vaise bhi gaaon me jaha 4 din lagatar light chali jati h waha kisko serve karna h, humein bhi ye PMEGP, cow loan, 10-12 boars exam & election duty nahi karni h 🤣
Before nationalisation more than 400 banks go broke in India and savings of lakhs of people went down the tubes. Nationalisation increased confidence of people and slowly they got out of clutches of moneylenders and their life saving became secure.. Now look what so called efficient private sector led banking system did to USA in 2008. TAR of 700billion was given out of tax payers money by USA government in 2008 which is equivalent to 3 times of India's budget of 2022.🙄🙄. India is a country of 140 crore people were 80 crore stand in line to take 5kg ration. Do you really think they can afford the heavy charge and meagre presence only 30000branches(only 20% in rural areas) of only profit seeking private sector banks. Wealth is stored in only 4 instruments - Land ,Gold, Debt and equity. As our land and our gold is our sovereign possession how can we allow our debt instrument(Bank Balance) 150 lakh crore to be controlled by only 30 lakh crore valuation of investors. And crooks of english media say that you have got depository insurance for your bank deposits. Now just imagine government comes up with a plan that all land and gold of this country will be managed by 100 companies and land and gold insurance scheme gets floated for land and gold, that out of your 10 acre and 1kg of gold, 2 acre and 250mg of gold is secured and rest you will get if any thing comes after liquidation. Just take time and imagine it's difficult to fathom. Government must protect our wealth which is stored in land,gold,debt and they can keep equity option open for creative destruction of wealth and constructive capitalism to prosper. We have not formed the social contract and paying taxes for our own robbing by government and erosion of our wealth by deliberately keeping high inflation and government not protecting our savings kept in bank. Time has come that capitalism must modify itself otherwise a lot of social unrest are in the offing. Even Lock, Mills and Adam Smith must be thinking about that who actually designed their policies on the surplus capital that was coming to Europe in 17th,18th and 19th century through colonial instruments. Before India become a country with $12000 privatisation will mean throwing the population again under the bus in clutches of moneylenders. Till then take a pause and take deep breath.. Even after that governments should be duty bound to protect our wealth as in free liberal world government must protect life liberty and property of citizens. And Mr Gupta just trumpeting any idea without fully understanding the social political cultural and economic context of a country looks premature on your part....
He didn't think much of economics of country before making the episode but to his economics of own pocket.
And that's how most of our media houses is running.
Totally agree. Its bad on the government's part to suggest privatising banking without fixing the problems the current banking mafia is doling out to Indians. I say this as a BJPian. Is our government not aware of what is the situation on the ground vis-a-vis private banks in India, their loan shark methods and their swindling of your savings accounts. Do they still want it....who in the government is benefiting with such measures? If our inflation is sky rocketing, if taxes are being levied on everything we consume, if our markets aren't doing as well as they are supposed to, if the middle class does not have enough opportunities or income, and who will never take dole from the govt., then who is accountable for all these macro economic disasters? In this environment the govt is talking privatization of banks....that really stumps me.
Entitled elites r always narrow minded.
Yes Bank is not merged with any PSU Bank? In all cases, when a private sector bank fails, the shareholders get wiped off. The bank is then sold to a PSU for Rs. 1.0. in return the PSU gets accounts, deposits, clients and a written down loan book. It is a huge gain for the PSU, if it can integrate the business and run it properly.
I have started to realise in past sevral episodes that they are always one-sided, they pick up a report and add a bunch of graphics and go at it, and depending on what Shekhar thinks he does a positive or negative episode about that. There are no counters or anything to it he just states what he thinks and makes it look like its the best opinion in the world because its his show no counters are discussed to his opinion. Just lazy reporting plus he should declare it that one of his sponsers is a private bank so he is clearly biased. Promoters of crony capitalism nothing else.
Dear Shekhar Gupta Sir, think of zero psb in India, how govt will run it's different schemes, how financial inclusion will be effective??? I don't think any pvt Bank will let a old man/women enter in their branch who is just surviving on their few hundreds of govt pension.
You should also analysis the type of priority sector lending between pvt banks and PSB. One of the most funniest thing you said PSBs are overstaffed, Sir right now in my brach we are working with 50% of sanctioned staff. In SBI there are 45 crores of customer with just 2.5 Lakh of employees, almost all employees are working overtime without getting paid extra.
They don't know the reality. Infact, all PSBs are under- staffed.
@@prashant0514 How old are you, kid?
Technology significantly reduces the cost of operating and maintaining a bank account
@@prashant0514 wait till u r in ur 40s, then we will see how talented u are
@@ArunKumar-dm4im he will comit suicide after working 10 yrs in a pvt bank today
Shekhar Gupta admits that he is no economist and yet explains economics better than any economist. Beautifully explained!
After watching this episode of print, & going through some comments, I would like to clear some misconceptions. PSBs don't get incentivized for operating rural branches, opening zero balance acct etc. Only source of benefit for PSBs from Govt are deposits from various Govt dept, & commission earned from handling Govt transactions. That also has decreased as Govt dept depts are now free to park their funds in Pvt Banks too, & rate of commission has been drastically reduced. Govt infuse capital to a PSB when that PSB doesn't have enough freed up money to lend in the market & earn income through interests. That happens when a PSB have to keep aside huge sum of money as provisioning for NPA & probable NPA accounts. Btw, corporate entities today have the largest share in NPA. So if you lament that large sum of taxpayers' money is 'wasted' towards PSB, you should also ponder why corporates are getting upto 95% haircut in their debts.
Govts i.e.PSU'S shareholders
has to infuse funds to shore up the capital of the PSU Bank. Why? Because provision for delayed interest and principal on corporate loans have eaten up the capital. Why are principal and interest on loans delayed? Because of wrong lending decisions i.e. an undeserving borrower was given the loan OR the PSU ba k was lax in monitoring the borrowers financial condition. It is these delayed interest and principal amounts that causes NPAs. The question to ask is why do Private Sector banks not have so much NPAs? Why do bank scams happen with PSU banks? Because either (I) the PSU Bankers are not skilled enough or (ii) they are corrupt.
@@titaboria PSU Banks are also forced by govt to give loans, for example majority of loans given to hawkers and farmers were sanctioned from PSU banks because no pvt bank will issue these loans, these loans are always collateral free and almost always farmers and poor people default on these loans as the money is used for not intented purposes. If the finance ministry for once, stop forcing public sector banks to issue loans according to their policies to appease the poor, their condition will dramatically improve.
If you see the lending data by panagariya, it is a myth that public sector lend more to disadvantaged groups. Secondly, most of the NPA in PSBs is to corporate who are politically connected and not disadvantaged.
The only solution to end this systematic loot of public money is to privatize these banks and let them fail or survive with better management.
@@theace691 These form a very small part of a PSU bank's loan portfolio.After all how much can you lend to a hawker. My bank auditor friends tell me that the loan to hawkers and shopkeepers as a reason for bank NPAs is the brain child of uninformed commentators and leftists. The large chunk of NPAs and bad loans is from big borrowers who manipulate the system in which not only the top management but the operational big wigs are involved. They act as the go between between the borrower and the bank management. They prepare the appraisal report the monitor the security and they assess the credit risk. These days the credit rating agencies are also included to spread the blame. The credit rating cos are a scam and unless they could be made financially responsible for their unsubstantiated appraisals they should not be relied upon.
@@rajendrakumarduggar1835 @Abhishek Kumar After reading the comments, it seems very few are concerned about the elephant in the room, i.e., political meddling. And you people don't seem to have any idea about stand of Leftists or Bank Unions. Lion's share of NPAs belong to big corporates, & anyone involved to Banking sector know this. Bank Unions too acknowledge this fact & voice their concerns when a some guy , after duping PSBs of hundred & thousands of crores, either flee the country, or settle the loan after getting massive haircuts at NCLT. Bank were nationalized for the very purpose of reaching to the lower strata of society. So it's quite natural that PSBs would lend to farmers, hawkers,atrisans,students through various schemes, where Pvt Banks would lag. Though they also get NPA in large number, often due political misinformation, still they constitute small amount of Bank's NPAs due to their small ticket size. But it's the large corporate NPAs which are hurting the PSBs most. What PSBs need is end of political intervention in sanctioning corporate loans, & fixing proper accountability for the top management who are generally involved in sanctioning those loans.
Surprising that people do not remember what led to privatization of banks in the first place, or if that is too old history, what worldwide disaster the private banks created in 2008.
IT WAS BASICALYY GOVT POLICY ON HOUSING IN USA .
@@aadityarawat4045 and its the govt policies right now that are killing the PSBs. Free collateral free loans to poor to farmers, to MSMEs, zero balance accounts, etc, etc. No pvt bank does this but PSBs are forced to issue these loans and to operate loss making accounts just because the govt said so. The Finance ministry even uses the PSBs as their policy conduits using them to effect the markets and as an election tool to give free revaris to poor in the form of free loan schemes. Banks ko loss making bna rhe just so they can sell them. Need of the hour is to make the management of PSBs Independent and allow them more autonomy and let RBI do the rest, they will easily become profit-making while helping the poor. Don't knw why we are picking the worst of USAs polices for own country and just promoting more and more crony capitalism in our country.
In USA, even the private banks were bailed out with government money in case of crisis.
that too everal times and at a much larger cost.
Those who are barking for privatisations of PSB here are requested to close their savings ac with psb n maintain the affordable min balanced ac of 10000 n above …. Is it affordable for poor n normal people ……
Ask the private sector banks to provide all govt schemed loans n achieve priority sector targets like psb …
Ask to attend all the customers equally then come n talk about privatisation …
Ask private sector banks to provide unsecured loans without securities for the same offered exclusively by the “private” government..
Ask the banks to stop forcing the public sector banks to provide welfare loans which will not be repaid mostly by you and the same was already not entertained by your private banks….
Ask private banks to open branches in remote area and provide the financial services…
Still so many questions are there first answer for these and then let me know for further questions….
PSB is for public and should be equipped with good management and given full rights for recovery and should relaxed from giving unsecured loans without securities though the government knows it will not be repaid …etc
Very, very lucidly explained. BTW, for the benefit of our other viewers, I watch all UA-cam videos at twice the speed. This way, I go through a 10-minute video in just 5 minutes. On a laptop, hit the shift+> and the speed will increase step by step. The option is available on the phone also.
Bank privatization should not be blocked via protests
You are so naive. There is gonna be protests against everything in india. A lot of people have nothing else to do 🤣🤣
Whatever be the conclusions of academic study on this topic, a few common sense observations are in order. 1. Original decision of bank nationalization was a step in right direction including additional nationalization in 1980s. 2. But by late 1990s, it was clear that its usefulness is coming to an end and negative effects are affecting the PSBs. But reluctance to privatize PSBs and ideological compulsion to keep them in Govt control by capitalizing it from time to time was definitely wrong. 3. Govt should offer a 100% risk free deposit schemes ( both saving bank with cheque facility and Fixed Deposits) directly to the public and let banks go fully private. This step would convert all banks into NBFCs! Similarly, for SMEs and agriculture, it should have come out with specific credit guarantees and support. 4. Modi Govt is dong privatization haltingly and half heartedly, This must change and Govt must get out of PSBs except perhaps one like SBI.
This episode is what all CTC episodes should be like. Thank you
Hi,
Glad for your response.
Shekhar Gupta Ji, Mr Arvind Panagariya left NITI Aayog to join Columbia University. He is so called Libertarian economist and wanted to leave almost all the things to market. And below was his reasoning -
“If I were at 40, then I would have got a job anywhere... the kind of job I have at Columbia is almost impossible to get at this age.”
Now, this is the benefit he will be getting from Colombia University as a professor -
"Faculty and officers of research holding full-time appointments are eligible to participate in the University's benefits programmes for officers. Some of these programmes assist officers in meeting the cost of medical and dental care for themselves, their spouses, and dependents. Others help to compensate for the loss of salary if they become disabled, protect them if they are injured while travelling for purposes associated with their University responsibilities, or provide their families with financial assistance if they should die. Still others help them prepare for retirement; aid them in meeting educational costs they incur for themselves, their spouses, and children; or provide assistance with the purchase of homes."
Hypocrisy ki Seema hoti hai kya??. 🤔🤔🤔
This man supports privatisation. 😕
CGHS provides more or less the same benefits. Every senior govt employee is entitled to free medical care, free tests, free medicines from all top private hospitals. Even after retirement. Source: my father is a retired govt scientist.
So your argument doesn't make much sense in this context.
P.S: Govt employees don't get dental benefits. Maybe that's why he left for Columbia!
@@appuljot8493 He was not goverment employee like an IAS or IPS.
He was chairman of an institution for a while. He didn't hv the job security here. He was not going to get any retirement benefits.
Dear Print - I have certain reservations on bank credit as % of GDP - i dont think China's 150% is sustainable (with BRI loans, domestic housing loans which are facing backlash now, etc.) and hence should not be considered as any holy grail of banking strength. So this should not be a KPI for banking sector - possibly 50-70% is good for growth without sacrificing loan quality.
Absolutely. It's not great to have more credit than expenditure. 😂😂😂
While your comment has financial prudence, geopolitics is what compels the overspend. Countries want to avoid the middle income trap that has seen the SEA tigers and Japan stagnate. Staying still is death in this new world.
@@rutvikrs over exuberance is death too. So my point is that we can't blindly copy any high debt country. We should hike revenue sources through optimal taxation and accordingly grow credit healthily.
Too much economic stupidity for geopolitics can't take you anywhere. Dutch british French Germany all realised this through multiple blunders over the past 4 centuries.
@@debchak27 I agree with you on the sentiment, but the modern system has posed a huge risk of disruption if one follows the model. US in particular has mastered the art of old money to the degree even OPEC will not be safe in the coming years.
Higher credit to GDP ratio works well only when it's backed by the development/infra/industry/exports/employment, if it is not backed by that, there will be huge bubbles that burst regularly and cause recession!
One of my friend was having a busines loan facilty with PSB for decades.
All of a sudden a private bank gave a better proposal and he accepted it.
Considering the processes involved with the private bank.
My friend now regrets in accepting the proposal of private bank as the paperwork involved is more tedious than the psb.
Even i took loan from psb bank.. And I haven't returned, they r also not interested in taking loan back
@@msdadsfsx this mentality of not repaying the loan is affecting bank's profit.. many people are not repaying the loan,eventhough they are having Money to pay it..
@@Siddartha1606 but if someone is giving you 1 crore for free will u take it or not.
@@msdadsfsx you are considering bank loan as free money..i kindly request you to think whether it is free money or someone's hard earned money..if you don't pay the loan, some eligible person may not get the loan..so i kindly request you to reconsider to pay the loan... In some way you are helping the nation..
@@Siddartha1606 I m talking from the perspective of nirav Modi, Chokshi etc
One of the primary mandate of public sector banks is financial inclusion unlike private sector banks. Unfortunately credit growth is probably very low in the hinterland as private money lenders are preferred by the people to the banks. The public sector banks have to earn the trust of the people in the hinterland and that is an opportunity with exponential potential to succeed. Jan Dhan accounts is a good first step in that direction.
Exactly and very few people seem to realise this and shekhar himself is completely oblivious to this maybe because of AU banks sponsorship.
Nitin Gadkari said
जिस देश का राजा व्यापारी, उस देश की जनता भिखारी !
For non-Hindi speakers - The country whose king is a businessman, the people of that country will be beggars
Donald Trump laughs in Dollars
You will not find any private Bank in rural areas and that why govt Bank has its own significant
Keeping 4 to 5 psb and letting them grow to full potential is not a bad idea
Loved this Shekharji, a nice effort to educate us all
Nationalisation of banks did create employment opportunities in government bank sectors and nationalization of banks helped the poor and middle class to open their account without paying high charges and they received high amount of interest in their savings and had low rate of interest in their loans.
BS
But sir hasn't the govt regulated banks saved Indian economy in 2008 crisis when banks like Deutsch crashed out of market??
Sir every psb in last quarter has shown profit , and what about 5lakh employees working for PSB it's not only personal but families and individuals who are loyal law binding citizen's who pay taxes and work with in the given framework and still make the best of the situations.
Coming from an PSB employee.
Please also be an voice for the workers. Waiting curiously for your take on this , sry if any offences committed, jus said my heart out
Any party who are trying to privatise banks must be outsted .Private and public banking should go parallel run.
Asking as a person who has little understanding of banking, what about the reach that govt banks provide? There are many places where a govt bank, probably sbi, is the only available bank. Private banks are unlikely to provide their services in those places since they won't be profitable.
Pvt banks don't even treat middle-class respectfully how are they supposed to treat poor with dignity and avail them the govt scheme benifits. In the majority of rural areas you will only find branches of some govt bank that provides serves to sevral villages. Shekhar boasts about traveling majority of india during his younger days and has never even noticed this which shocks me tbh. We are going towards crony capitalism so fast thats its horrible. Plus no one mentions who rescued yes bank when it failed.
All banks are under legal obligation to open their 25% branches in unserved areas.
If the govt wants reach it should pay. With PSU they can implement any nonsense strategy.
@@tindrums govt will pay with your money my dude
@@naveenparashar4256 not that I don't believe you, but do you have a source for this? From what I can find, this does not seem to be the case
The only news source that analyses and explains research papers. Kudos The Print, hats off to the incredibly high quality of journalism here.
Hi Kunal,
Thanks for appreciating our Journalism.
Minoo Masani's comments on the perils of bank nationalisation were spot on. Actual outcomes were perhaps worse.
India should remember minoo masani 🙏
I cannot find the paper anywhere neither in the NCAER website nor in the author's home pages. Is it not published yet? There no direct url in the desc. Question: How much of these consequences can be attributed to the NPAs disclosed a few years ago and the unbalanced credit push that bided the Indian economy during the 2008 global financial crisis?
Me neither!
Hi,
The paper has not been released publicly as yet. We have added the link to the NCAER website. It should available there soon. Request you to keep checking the given.
@@ThePrintIndia there should be a limit to fake news and propoganda, and unfortunately, you guys are spreading it badly.
@@ThePrintIndia fake data, fake sources, unauthenticated sources, fabricated data presentation, just name it. The Print is shamefully into it.
To be honest, I thought this was about Battery Banks on Uninterrupted Power Supplies. I grew fond of this show so I will watch it - nice to know a bit more about India!
I believe Econometric Methods were either created or used for the first time in India, right? Thanks!
@shekhar Gupta
The NCAER website does not have that downloadable paper.
It only carries a news item, which points to Times of India article dated July 12, 2022.
I used the website's search, and also went through the _"Publications"_ and _"Working papers"_ sections.
I searched for this title in Google and Google Scholar but drew a blank there also.
Could you please post the whole link?
Sir, the unprovided part of GNPA is NNPA. And they are not written off till they are on balance sheet. If written off, the loan is removed from GNPA as well.
Brilliantly explained, would like to listen to your talk on Demonetization 1 & 2
How many loans are given to farmers by private sector banks? As loans to food processing industry or fisheries is also considered as loan to priority sector, private sector loans there and meet its target. Not to ground level farming sector.
You can keep some PSBs but why do we have 12 PSU banks? Argument is private banks is better for economy overall and more should be privatised. We can keep SBI and PNB in public ownership.
There are agriculture oriented banks for that ... co-operative banks,grameen banks and NABARD banks
Great content and delivery as always... thank you so much. I do wish though that all CTC videos could be limited to 15 mins, ans surely less than 20, with separate add-on insight clips which one can navigate to and consume if they feel so.
Hi Veer,
Glad for your response and thanks for writing in with your feedback.
Wow does private banks lend to priority sectors and promote govt sponsored schemes. Just go to any pvt bank for opening zero balance account and they are gonna kick you. Our financial inclusion is still quite less. PSB are the one whom middle class people relies upon. PSBs failed earlier due bad corporate loans? Pvt banks were afraid of lending them and country needed to boost it industrial and service sector. You can argue that many loans became NPA but how many companies became bigger and support for economy do count that. There will be a chance of loans becoming NPA. If PSB lended 1000 loans and 50 became NPA then PVT lended just 100 and 10 became NPA. Simply criticising PSB won't help govt either. NOT a single govt sponsored schemes are properly implemented by pvt banks. And they talk about privatisation of all PSBs. And once govt exits people suffer. See in telecom sector last govt bastion BSNL fell and now pvt players are increasing price like anything citing any reasons and you cannot do anything except suffer. Financial sector involves money if people suffer on that front trust me whole country will suffer.
Technological upgrade needs money and govt takes PSBs profits in its own pockets.
And Salary of PSBs are less.
Let me tell you why people want Sarkari or PSB Naukri. It's not like they don't want to work. It's that there future is safe. Their salary increases with inflation. And they know that they don't have to run or hop upon multiple places or get laid off dure to restructuring and age discrimination. PSBs don't guarantee high salary but it guarantees job security. And do you still think the youth is fool who is ready to sacrifice his 20s for govt job. The person who gets top marks in GATe gets PSBs people selected in PSBs are in thousands among millions. They are the best of best.
It takes courage to live and serve in remote areas. Visiting a village for a day won't give you clear picture.
Now a days many people are taking business loans because they are laid off from their companies at an age where they have to take care of there children education and pay housing loans. Getting laid off at 40-50 doesn't seems good nor getting less salary.
If people think that it's false see Korean debt trap on CNA news. Videos was taken down but still you can read article.
All PSB's lend to priority sectors. All PSB's open Jan dhan accounts
2. that was the problem. Out of a thousand over 100 were turning NPA
3 why privatize all banks. Why not just maintain one or two PSBs let there be competition?
India is the cheapest Telecom sector in the world. Seriously, the current rates are unsustainable the entire industry will collapse if the rates are not increased.
2 also BSNL is still there plus they now also have 4g services
@@amithabv1060 see the price and compare. People will run towards BSNL after they realise that the bills are burning their pockets. India is still a developing country. People rely heavily on govt for their upliftment and if that is stopped the GAP will increase inevitably. Reason why govt still isn't privatising Railway for example
@@himanshunarendrasen108 those who can pay and are willing to pay will pay for better service. Yes people rely on the government for their upliftment, but to uplift those people the Government needs resources and that has to come from somewhere. The government cannot lift up the entire country on its own.
The opening comment that nationalisation was a blunder is not substantiated since comparison has not been made for the pre-nationalisation period and 20 years after it especially in the social sector
They also forget to mention that 2008 global financial crisis was triggered by a private bank "Goldman Sachs".
I'm completely with u on this,plz do this sorta thing regularly, especially abt privatization!!
Great Analysis. Well Explained SG sir!
Truly doing good for Prints Media investers with shoddy data. Why don't you mention zero balance accounts with PSB vs Private banks you will know true picture. Tell me who is the biggest shareholder of YES bank now it's SBI with almost 20000 crore injection form SBI.
This guy seems to have vested interest. Needs to check the funding of his venture
On economic issues, Shekhar Gupta is an open market fundamentalists.
@@akshayahuja2798 AU Bank is the sposer to one of his shows you don't even need to check lol.
👍👍 Excellent report....
A series of CTCs on all kind of banking institutions in India....RBI, NABARD, NHB, NBFCs, PSUs, RRBs and private banking. The condition of Cooperative banks and credit societies.
1. Please explain the matter of 6 sahara group companies, Sahara Credit cooperative societies.
I am sceptical that private sector employees are paid more than psu banks. SBI Bank PO is paid about 55000/- whereas ICICI Bank PO is paid about 36000/- . SBI branch manager - 12.5lpa to HDFC branch manager 8lpa to 15lpa.
I don't know how private banks pay "much much" high? I'm willing to change my mind, pl anyone enlighten me!
Manager and top level, compare salary of CEO of both, you will get the idea. Moreover, as we diversify industries and more employment is generated, private sector becomes attractive cause then there will be shortage of skilled workers
SBI po is getting gross approx 70k +monthly allowance 10-12k+lease accomodation 10-35k ctc is 11-14lac and branch manager is getting approx 2 lac including perk allowances and lease and ctc is 20-25lac
In govt always lower level will earn more. As you grow higher the private will pay more. True for all. Not just banks.
@24:33
You nailed it
Barring SBI, Sell all other PSU Bank.
Its urgent, do it fast.
Excellent episode.
Funny thing is most of the Banks in China are Public sector !!!! and they are still full time in the ever greening of NPAS mode ... In any case diverting public savings to "priority sector" which is highly influenced by politics by using force of regulations is a classic moral hazard and best managed through other government institutions raising market borrowings [ bonds etc ]
Where was the section about the conference held by The Left in support of nationalisation? Very pompously you had said that we bring discuss everything/ every side.
Excellent data driven episode 👍🏾
Hi Pichumani,
Happy to note that you liked this episode.
This is one the most depressing CTCs ever. Despite such overwhelming data and fact based evidence, why would Congressand Left still support it? ShekharJi, what are their arguments and do you think they are valid? I'd hate to jump to conclusions that they are stupid, blinded by family/ failed ideology and at this point, plainly anti-national.
This data is one sided. Data can be presented in any direction. All the failed private banks are merged in to public sector banks for political gains and PS banks balance sheets are messed up. It is about allowing banks to operate autonomously without political pressures. One would have let the Yes Bank to go bankrupt instead of merging with PS Banks.
Its pretty normal in politics. Even modi and gang (jaitley , sushma) took on the anti-national hat when UPA was in power. Wont let the govt function. You look at Modis tweets , full of contradictions before / after grabbing power.
He presented the data which suits his narrative. He should have spoken about number of zero accounts(pmjdy) opened by pvt banks and public sector banks, these are just burden on bank and opened for financial inclusion purpose.. More than 90% of zero balance accounts opened by psu banks.
You are school In itself. Salute shekhar Gupta sir
Hi Aniket,
Thank you for following our CTCs. Do keep tuning in daily!
Not able to find this report being refered @print plz share the link
Hi Vishal,
The paper has not been released publicly as yet. We have added the link to the NCAER website. It should available there soon. Request you to keep checking the given.
Good Analysis.
The said Policy paper is not available...Please share it If u Have?
Hi Bala Subramanian,
The paper has not been released publicly as yet. We have added the link to the NCAER website. It should available there soon. Request you to keep checking the given.
@@ThePrintIndia ok
Very different and fresh view by Shekhar Gupta. Those who oppose privatisation should also consider these aspects.
But then, those who support privatisation shoud also consider that in some developed countries, those to whom India looks as role model, they were needed to bail out private banks by Govts money a many times.
I am shocked to see Jairam Ramesh's comment. I thought he was a pro-growth reformer.
Nah, he stopped lot of projects on environmental grounds. He is as left(economy) as Modi. Only right(economy) politicians are Manmohan, Chidambaram, Atal bihari Vajpayee and Yashwant Sinha if you evaluate actions.
@@badalism Yashwant Sinha? You mean Rollback Sinha?
After Rao's Biography by Vinay Sitapati, Jairam Ramesh became a leftist after 2004.
Having worked in a bank please understand the agricultural finnancing as mandated and reported is a sham. Take Kerala state. If you look at the agri loan portfolios in the state you will see loans classified as agri loan, but travel through the state and you will find no significant agri activity is happening in state compared to loan reported. RBI must get it's act together. Talk lo lower management staff in branches to understand how their hands are tied even to lend to genuine people without fearing punishment should those lending go bad for any reason. The truth is that from RBI to governement these is no banking culture that's needed for this country which is unique unlike European or western countries . Blame policy and not poor staff as responsible. Mind you bankers in India is among the most underpaid, again ensured by Government policy.
MR. Gupta i have always admired your courageous & straight forward journalism, please make an episode stuck real estate projects, how money( bank loan ) has being laundered, home buyers stuck running from court to court ( Rera ,Nclt & Ncalt) .please study a case in point 3c orris greenopolis project sector 89, gurgaon. You will shocked.
Sir though you covered priority sector lending but would like yours insight on effect of Jan dhan yojana/mudra yojana/apy on bank's both nationalised and pvt along with govt pressure on bank's for credit especially nationlised banks
Great work and presentation of the paper by you.
I happened to read the research paper,very well written paper and an important for our young generation to understand past and present Economics of the country but There are multiple things authors didn’t take into consideration when they are calculating the NPAs for example:
1. The haircuts by the governments are nit accounted ( for the entire duration of analysis)to reduce the balance sheet of NPAs . That was the biggest numbers magic to be aware of and thus this is not the entire picture…
Also every policy(financial and socio economical) should be looked in congestion with the time line and state of implementation.
Indian socialism is a joke honestly, on one hand we barely invest 1 percent in public
Health and barely 2-3 percent education on the other hand the central government is heavily involved in banking, insurance, Power plant etc.
GOI needs to disinvest from banking and insurance and let the market take over and use those funds in health and education and transport infrastructure (modernizing Indian railways , modernizing roads). Regarding rural branches, rural cooperatives can take over and partner with pvt urban banks and with DBT and Bankmitra schemes this isnt a problem anymore. All the other CPSEs like Bhel, ntpc , Bel , hal etc need to be privatized as well.
India always inherits a foreign concept and makes the worst of it. We have the worst of capitalism and worst of socialism. At independence we inherited pacifist ideology and lost land to both neighbours. We imported Marxism but ignored everything he said about industrialisation. Instead we only focused on his ideas re oppression and started blaming particular communities for being “oppressive”. India is like a filter which only allows the worst parts of ideologies to go through. Rather than health or education we chose PSU employment to create equality. How dumb can we be? We created multi billion dollar MNREGA but don’t have a social security system. We fight for expensive PSU employee pension systems but don’t even have pension for those in need such as disabled, those injured in work accidents.
Another gem from Shekhar Gupta Ji
Sir it's easy for us to talk privatisation. Government will find it very difficult.opposition will start crying ki desh bech diya
Highly informative videos thanks
Hi Ajay,
Glad for your feedback.
Excellent shekhar 👍👍👍👍sir 👳
Thank you for this information
Hi Vivekanand,
Thanks for tuning in.
Curious to know one thing, if there is increase in personal loans that included Pvt bank lenders too, then more people are getting it means more financial inclusion, but rural loans data need to be analysed too i guess.
Thanks
Have you taken into account the removal of grip by local moneylenders on farmers and the fast improvement by the farming sector due to bank nationalization? I understand all rubbish happened due to loans to big sharks. Can you throw some light on the share of bad debts by the banks, you were mentioning, by segregating between the farming sector and the non-farming sector? I am over 70 years and have seen the growth of the farming sector in Tamilnadu after this event and hence this question. I know LOan Melas by Janardhan Pujari ruined this effect to great extent.
When emphasis on Personal Loans comes ad of KiA as well appears down there. Do your part, get your loan and get the KIA 🙂🙃
Only this missing was an advertisment from AU bank to make is argument bulletproof lol.
Public sector banks are "companies", but they're not regulated under the Companies Act, 2013 (or its predecessors), which is why you don't see their being a "Ltd." suffix ahead of their name.
The SBI is formed under the SBI Act, 1955, the others under the 1969 or 1980 bank nationalisation acts.
Thanks for the good reporting on Banks. I am not sure how safe the private banks are I was really worried about my money in a private bank after YES bank went down.
The Govt should completely get out of banks and let the market ride it along. The govt needs to establish a insurance similar to USA(FDIC) for up a certain amount. You cannot keep holding hands and helping all the time, at certain point the govt have to let go, survival of the fittest.
Can you please share a link of the entire paper by Poonam Gupta and Arvind Panagaria ?
Only NCAER website link is provided.
Kindly share the link of the Paper in the description.
Hi Gagan,
The paper has not been released publicly as yet. We have added the link to the NCAER website. It should available there soon. Request you to keep checking the given.
Some PSB need to take social programs like jandhan scheme just like railways, BSNL have offered cheap service due to social commitment
The personal loan sector came into its own after liberalisation. And Public sector is not behind. And they give it at lower interest- benefitting the consumer or to us.
Government should not be in the business of business. Except for the government led by ABV, no one has done anything substantial to remove the role of the government in running, owning a business. The current government has the right intention though.
Can someone pls tell me where can i find a copy of this report
Hi Manas,
The paper has not been released publicly as yet. We have added the link to the NCAER website. It should available there soon. Request you to keep checking the given.
This is quality!! Explanation that can be understood by any common man and great presentation. Keep going SG and team, kudos 👏🏻👏🏻
Shekhar ji, this episode cluttered the topic more than it cut it. You can say you were just commenting on the NCEAR paper but The Print has very good economists to speak about the topic. Global banking and monetary systems are what scientists call Complex systems. Pumping public money into PSU’s - guess GOI also pumped money into Yes Bank. Globally, Too Big to Fail and Too Big to Jail, needs to be understood. Although Khochars in India may have seen some time in Jail.
The private banks in India today are struggling. Even Aditya Puri sold about 95% of his share holding in HDFC bank before handing its reigns to his successors. Trust in his own successors in case of HDFC Bank and Integrity and credibility in case of ICICI Bank, are reminders, besides Yes Bank shows that something’s are rotten in Denmark
That said only SBI, BoB and maybe Indian bank in the PSBs will be there and are needed.
In the last three years, for a small shareholder like me SBI has given me more returns consistently than HDFC Bank.
Companies talk about monetising their subsidiaries by listing them. this merger of HDFC twins is a picture no one knows why it was done. To bail out which of the twins, I don’t know.
I am and continue to be a very very small shareholder in both SBI and HDFC banks, ever since their IPO’s. The trust in the latter is waining after Aditya Puri’s sell-off
Get someone from your economic think tank declutter your cut the clutter
Only a few instances don't prove anything. Both your comments and this NCAER paper looks at a select few aspects, not all. Both can be refuted!
Tax payer's money used for bank recapitalisation could have been used for healthcare infrastructure like more MBBS seats in govt colleges, more AIIMS hospitals, Insurance for all without exclusions, better medical equipments, tests, cheaper medicines and more investment into R & D in medicine, diseases.
Exactly 💯
Thanks sir for keeping the facts. A tight slap on those crying bank bech dia, desh bech dia.
Hi Karan,
Thanks for writing in.
Well corroborated and explained.... Banking sector must need a hollistic review
One major factor for rise in NPAs is because of aggressively declaring accounts as NPAs.
Very insightful content, that rest of mainstream media fails to focus on!
However, let's not pin too much faith in Chinese financial data integrity. Especially (23:02) with burgeoning real estate NPAs of Evergrande, Fantasia, Kaisa, etc. in last 2 years, plus Henan Bank run. Indian NPAs are toddler in comparison, I feel.
He speaks for his investers
We as human beings require different types of food to stay healthy, so our banking system also, for the different needs of different people both government and private banks should operate, but always it has to do profitable and ethical business…
These type of analysis look good only academically. It gives oneself a feeling that if we privatize all the Indian Banks we would have solved all the problems that Indian Banking System has. Also, it would not be fair to compare our Banking System with likes of USA, China, S Korea, Japan. In US Banking is heavily regulated enforcing several compliances for the consumer protection such as FDIC. Also be mindful that if Private Banks fail in India, Govt would still need (like it or not) to bail them out. That's what has happened in USA via Troubled Asset Relief Program (TARP). Academic/Economic research is all fine, but it is not as easy of a decision as Shekhar Gupta is making us believe.
Privatisation is not panacea by any means but it is a big improvement. Obviously, it has to be followed by strong regulatory environment but nothing like current situation where 9.5 lakh crore was infused between 2009-19 by the govt. in these banks.
Political lending is a norm in these banks which takes place due to lack of accountability and responsibility for losses.
We have already seen the role of regulators like TRAI, CCI and more recently SEBI being run via a Yogi in Himalayas 😒
@@imsisodia Not SEBI but NSE. Anyway, there are hits and misses but rI feel that the right way is to strengthen the regulator rather than owning the whole system and making it totally inefficient !
SEBI is supposed to regulate NSE or am I missing something?
now I request you to go through writings on why all nationalised banks should not be privatised and come back and explain us.