'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.
London, Nov 22: A bomb disposal squad deployed as a “precaution” to the South Terminal of Gatwick Airport concluded an investigation into a "security incident" on Friday after making a “suspect package” safe.
The South Terminal of Gatwick Airport, the UK's second busiest airport after Heathrow, which was briefly shut owing to the incident reopened following the incident.
The Gatwick is around 45 km south of London.
Two people detained during the enquiries have since been allowed to continue their journey as the airport was opened.
“Police have concluded their investigation into a report of a suspect package at Gatwick Airport. Officers from the EOD (Explosive Ordnance Disposal) team made the package safe, and the airport has been handed back to its operator,” Sussex Police said in an updated statement.
“Two people detained while enquiries were ongoing have subsequently been allowed to continue their journeys. There will remain an increased police presence in the area to assist with passengers accessing the South Terminal for onward travel,” the statement added.
Earlier on Friday, the incident caused severe disruption at the busy airport’s South Terminal, while the North Terminal of Gatwick Airport remained unaffected.
“Police were called to the South Terminal at Gatwick Airport at 8.20 am on Friday (November 22) following the discovery of a suspected prohibited item in luggage,” a Sussex Police statement said.
“To ensure the safety of the public, staff and other airport users, a security cordon has been put in place whilst the matter is dealt with. As a precaution, an EOD (Explosive Ordnance Disposal) team is being deployed to the airport. This is causing significant disruption and some roads around the South Terminal have been closed. We’d advise the public to avoid the area where possible,” it said.
Footage on social media taken outside the airport showed crowds of frustrated travellers being moved away from the terminal building.
Gatwick said it was working hard to resolve the issue.
“A large part of the South Terminal has been evacuated as a precaution while we continue to investigate a security incident," the airport said in a social media post.
“Passengers will not be able to enter the South Terminal while this is ongoing. The safety and security of our passengers and staff remain our top priority. We are working hard to resolve the issue as quickly as possible.”
Train and bus services that serve the airport were also impacted while the police carried out their inquiries.
In an unrelated incident in south London on Friday morning, the US Embassy area in Nine Elms by the River Thames was the scene of a controlled explosion by Scotland Yard dealing with what they believe may have been a “hoax device”.
“We can confirm the 'loud bang' reported in the area a short time ago was a controlled explosion carried out by officers,” the Metropolitan Police said in a post on X.
“Initial indications are that the item was a hoax device. An investigation will now follow. Some cordons will remain in place for the time being but the majority of the police response will now be stood down,” it added.
