Category Banking&IT sector

Mobiles May Make Banks Extinct

By Prof R.Vaidyanathan on 17th April 2017 The mobile phone is now being used for small-time financial activities, such as information on prices, billing settlements, etc. We have service providers like Air Tel/Jio providing internet based TV channels which will provide competition to Dish TV /Tata sky etc .Over period of time satellite based TV […]

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Reducing corruption using technology

The index of middle class misery can be measured by adding the tax rate, the inflation rate, and the corruption rate. The last one is not discussed in open forums by experts since they are worried about the next round they need to face. The major source of irritation and corruption faced by the middle […]

Hasten slowly in opening up the banking sector

The reform debate in India has developed a single-point focus on the entry of foreign entities into various sectors. Whether it is retail trade or education or banking, the word reform means allowing the entry of foreign players. It is really unfortunate because there are a zillion other things one needs to do in the […]

The art of killing micro financial institutions

A colleague at a well known US university asked me once about areas which are not regulated by the government in India. I thought about it and the only answer I could give was pertaining to music /dance performances and other art forms as long as one does not want government awards. Government does not […]

RBI must ensure daily interest on savings a/cs from April 1

A passing observation by Reserve Bank of India (RBI) governor in the annual policy statement for 2009-2010 made on April 21, 2009, is important and reveals how the banking system is taking the common customer for a big ride in terms of making them lose a significant amount of interest from the savings bank accounts. […]

Education loans — Needed, a fresh and sustainable model

If education is to play the role of equaliser across class segments and if learning has to be acquired by borrowing, institutions and regulations in the sector must be strengthened so that repayments are made correctly and on time, suggesting a mechanism to ensure this. Some news reports suggest that the HRD Ministry is toying […]

Recognise moneylenders, integrate them

It would be ingenuous to make them a part of the banking system. Somewhere in the fifties, the leftist economists who dominated our planning process decided that our traditional moneylenders were monsters who had to be destroyed by the socialist institutions of the state. Similar ideas got reinforced after the bank nationalisation in the late […]

Financial markets — Segmented domestically, integrated globally

Though the unorganised sector dominates in sectors such as trade, private transport and hotels, it does not get adequate funds from the public sector banks, which are geared to “asset based lending” rather than lending based on cash flow forecasts. To reduce the borrowing cost of the unorganised sector, the financial market has to be […]

Why financial system must legitimise moneylenders

It is important to recognise moneylenders as legitimate agents of economic activity. They have extensive network and substantial credibility. Banks must treat them as channel partners and provide them with credit. Importantly, moneylenders should have the flexibility to access the deposits from the public, as any other financial institution. We have an uncanny knack of […]

Is it end of the road for community-based banking?

The spirit of grassroots entrepreneurship, which is the basis of the country’s growth, must not be snuffed out by software solutions that ignore human judgment, and half-baked policies formulated by the metropolitan elite who know more of Wall Street than our own Ranganathan Streets, Brigade Roads, or Ajmal Khan Roads. Nagamma has been a flower […]