Finance Minister P Chidambaram and RBI governor Raghuram Rajanare preparing for the festival season. Top of their to-do list is providing banks with money so that they in turn can provide consumers with money to buy goodies. The idea behind it is to propel growth. Well it’s a bad idea and will not help. Like everything these days, here are five reasons why it is such a bad idea. 1. The govt plans to shell more funds apart from the Rs 14,000 crore earlier earmarked to be given to public sector banks. This they expect will help them lend more at lower interest rates to people interested in buying two-wheelers and select consumer durables. Well, how many of us have seen financing schemes of public sector banks (except for SBI in some cases) at the auto showrooms or electronic shops. It is either the private sector banks or nan-banking finance companies who have captured the market. Giving money to public sector banks will only end up in more decorative lights at their branches.
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