'Brutally unfair' that system can't protect common man's savings, says HDFC chairman Deepak Parekh
Mumbai, Oct 11: Amid the crisis at Punjab & Maharashtra Cooperative Bank (PMC), HDFC chairman said it is "brutally unfair" we have regular loan waivers and corporate loan write-offs but no financial system to protect the common man's savings.
The scam at PMC Bank has affected thousands of its depositors as their money is stuck with the urban cooperative bank's after RBI had put a withdrawal limits at Rs 25,000 per accounts last month.
The restrictions from the RBI came in after it found the bank's exposure to real estate developer HDIL was in too much in excess of what the regulations require and also as the lender hid the NPAs of HDIL.
PMC's exposure to HDIL is around Rs 6,500 crore, which is 73 percent of its loan book of Rs 8,880 crore, as per bank's own admission.
"To my mind, there is no greater cardinal sin in finance than misuse of the common man's hard earned savings.
"It seems brutally unfair that we have allowed a system of loan waivers and write-offs every now and again, but yet we do not have a robust enough financial system to protect the honest common man's savings," Parekh said without mentioning any particular incident while launching a centre for financial studies by B-school SP Jain.
He said trust and confidence are the backbone of any financial system and one should never underestimate the power of ethics and values.
"It is a pity that this is so often eroded," he said, but was quick to add this problem crops up across the world.
Calling for encouraging savings if credit were to grow, Parekh said the savings rate at 30 percent of GDP has been showing a declining trend over the past decade.
"Household savings is important for any economy and that is why there is likely to be a threshold beyond which lowering interest rates becomes difficult," he said.
Our savers prefer assured returns which is why fixed deposits continue to remain the preferred choice of savings, he added.
He said the crux of the problem with the financial sector is that the flow of credit to the commercial sector is still clogged.
Talking about economy, he said given the global slowdown, our growth rate is still better. "Yes, we are facing short-term challenges, particularly on consumption growth, but these appear to be cyclical and not a deep-rooted malaise."
Parekh said there is no other major economy that currently has the capacity to absorb the scale of investments that India needs or has the growth potential that we have.
"Market cycles are inevitable. But as long as we are able to self-correct, work towards financial sector reforms, bring in enabling policies, encourage true and fair entrepreneurship and have a stable rule of law, I think there is no reason to believe why India won't retain its rightful place on the global stage," he said.
Addressing the event, former chairman of SBI Arundhati Bhattacharya said if the country wants to be a USD 5 trillion economy, then the financial system should be strong enough.
Supporting the merger of public sector banks announced recently, she said the though it is painful the government has done the right things of merging the struggling state-run banks.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
EC can choose counting personnel, no further order needed: SC on TMC plea
New Delhi (PTI): The Supreme Court on Saturday said no further order was necessary on the TMC's plea challenging the Calcutta High Court's dismissal of its petition against an Election Commission circular on the deployment of central government personnel for vote counting in West Bengal.
A special bench of Justices P S Narasimha and Joymalya Bagchi said the Election Commission can choose the counting personnel, and its April 13 circular, which provides for deployment of state government employees as well, cannot be said to be incorrect.
The poll body said the apprehensions of Trinamool Congress (TMC) of any wrongdoing is misplaced, as the circular very clearly states that there will be a mix of central and state government employees.
The Election Commission assured the court that the circular would be implemented in letter and spirit, and there would be state government employees also during the counting of votes on May 4.
At the outset, senior advocate Kapil Sibal, appearing for the TMC, said the circular was dated April 13, but they came to know about it on April 29.
ALSO READ: Anbumani asks PM Modi to ban sale of cigarettes for those born after 2009
He said there are four issues: One, the circular appointing Central employees was issued to DEOs on April 13, but came to their knowledge only on April 29; Two, the Election Commission says it has apprehensions of irregularity, despite having a Central nominee in the counting process; Three, the poll body already has a Central government officer at each counting table in the form of a micro observer, and four, the commission has not appointed state nominees even though the circular provides so.
Sibal submitted that the Chief Electoral Officer's communication states that there are apprehensions expressed from various quarters regarding possible irregularities in counting.
"That is like pointing a finger at the state government..." Sibal said, adding, "There must be some data. Where is (the proof of) the apprehension (raised) from each booth? They have not disclosed this. And why not tell us that they are going to have a Central government nominee?"
The bench, which held a special sitting, told Sibal that even if the Election Commission's circular had provided for the appointment of Central employees as both the counting supervisor and the counting assistant, the court could not have faulted the decision.
"The option is open for the Election Commission: whether the counting supervisor and assistant may be of the Central or the state government. When that option is open, we cannot hold that the notification is contrary to regulations. Even if the EC says that both of them can be Central government employees, we could not have faulted them. Because regulations say that either the Central government or state government officers can be appointed," Justice Bagchi told Sibal.
Sibal then submitted that the court may ask the Election Commission to follow the impugned circular in its entirety, which provides for a state government nominee.
"All we want is, in terms of the circular, the state government nominee should be there," he said.
Justice Bagchi asked if he wants compliance with the circular, then why is the TMC before the court.
Senior advocate D S Naidu, appearing for the Election Commission, submitted that the returning officer is a state government employee with overarching power to deploy personnel from any pool of government employees.
"We are saying that there will be state government employees during the counting of votes," Naidu submitted, adding that each candidate will also have their own counting agent.
"The TMC's apprehension of any wrongdoing is completely misplaced," he reiterated.
The bench then disposed of the plea, saying that no further order is necessary and reiterated that the Election Commission will follow its circular in letter and spirit.
Polling for the 294-member West Bengal Assembly was held in two phases -- April 23 and April 29. The counting of votes will be taken up on May 4.
On April 30, the Calcutta High Court dismissed the TMC's petition against the Election Commission circular, saying there was no illegality in the poll panel's decision to appoint counting supervisors and assistants from Central government and Public Sector Undertaking (PSU) employees, instead of the state government staff.
In the high court, the TMC had challenged an April 13 communication issued by the additional chief electoral officer of West Bengal that stated that at least one of the counting supervisors or assistants at each table should be a Central government or PSU employee.
The TMC's counsel had argued before the high court that the communication was issued without jurisdiction and was based on mere apprehension.
The EC's counsel had contended before the high court that the Representation of the People Act, 1951, allows delegation of the commission's functions and that the directive was valid.
The poll panel's counsel had also submitted that the communication was issued on April 13, but the petition was filed only on April 30, close to the counting date, alleging that the move was intended to stall the process.
The high court had not agreed with the TMC's allegation that its main opponent, the Bharatiya Janata Party (BJP), controls the employees of the Central government or PSUs, making them susceptible to suggestions and control by the Union government.
It had also noted that apart from the counting supervisors and assistants, micro-observers, counting agents of candidates, and other personnel would also be present in the counting hall.
