LETTER TO EDITOR FOR DEC 02 ISSUE 2017

BRINGING LIGHT: Dean of Goa Medical College, Dr. Pradeep G. Naik lighting the ceremonial lamp to mark the State Level Function organized by Goa State AIDS Control Society on the occasion of “World AIDS Day 2017” at Secretariat Porvorim on December 1, 2017. Also seen are Director of Health Services, Dr. Sanjeev Dalvi, Chairman of GSACS Core Committee, Dr. Digambar Naik, Project Director of GSACS, Dr. Jose D’ Sa and CMO – DHS, Dr. Chandrakant Porob

BANKING ARMAGEDDON!

IT’S a real banking Armageddon! Understand how the “kitchen sink” is thrown at you by this government. Banks the world over get into problems when the loans advanced by them are not repaid on time by borrowers. When the economy is on a slowdown many of these borrowers go belly up and become NPAs. Normal banking prudence suggests that the banks should auction the assets given by the borrower as security, at the time of taking loans.

Generally banks insist on 150% security of the loan amount at the time of giving loans.  For example, if a borrower wants Rs100 as loan, he has to provide security worth Rs150 before availing the loan. However, for big borrowers every norm is flouted  and when they become NPAs like that of Anil Ambani in Telecom, you are talking outstandings worth Rs45,000 crore!  Now the question is  who will replace the funds that were loaned to him?

Today the NPAs of Indian banks amount to over Rs10 lakh crore. Jaitly or Urjit Patel do not give the actual figures. To rescue these banks the government has two options. There is ‘bail out’, which means the government uses tax-payers money to fund the bank. This is very wrong but it has now been happening quite regularly in India.

The other monstrous option is called ‘bail in’. This term forms the very pivot of this post and has never been resorted to in our country earlier. Now what is bail in – it  rescuing a financial institution on the brink of failure by making its creditors and depositors take a loss on their holdings. A bail in is an internal process and is the opposite of a bail out which is external and handled by government with budgetary allocation.

You just deposit your money in a bank as a savings deposit to use it whenever you want. You have no clue  as to how well the bank is managed. Now Modi and Jaitley  have got a bill  approved by the Cabinet called the Financial Resolution and Deposit Insurance  Bill, 2017 and this has now been referred to a Joint Parliamentary Committee before getting it passed in Parliament. This bill covers “bankruptcy of businesses such as banks and insurance.” Financial resolution includes solutions for banks facing “imminent” risk to their viability and their very existence, depending on their capital, assets worth and quantum of NPAs.

Now comes the wily Jaitley into the picture. This bill also introduces the provision or a bail in the purpose of which is to provide capital to absorb the losses of a bank and ensure its survival. Here survival does not mean safety of  depositors’ money but restoration of bank capital. The bail in empowers the bank to cancel a liability owed by the bank or change the form of an existing liability to another security.

In simple words, it means that your savings account balance of Rs15 lakh can be reduced to Rs1 lakh and this is mandatory by law. Or they can convert your savings account balance of Rs15 lakh to a fixed deposit  repayable after five years, giving you 5% annual interest. And you can do nothing about it. Want money for your daughter’s marriage? Bad luck, you cannot access your money for the next five years!

 When the banks make hefty profit, you don’t get anything but when they’re into losses, “suppliers & depositors” have to lose their money.  And the heartless due of Modi and Jaitley have come up with yet another brutal aspect, just unbelievable! To recover the money from defaulters, there is no attempt so far by the Reserve Bank of India to blacklist these entities from getting further loans or prevent their managements from retaining a majority equity sake, as penalty for the huge haircuts (writing off loans) being taken by banks. Ambanis and Essars can go away Scott free and we depositors have to clean the toilet.

In a nutshell they are now trying to shift the responsibility of rescuing the “sinking banks” from the government to the “Suppliers & Depositors” of the bank.  The borrowers can go on a fishing trip. Trust in the banking industry would be decimated. People would gradually close all their bank accounts and keep their cash under the bed. Bloody madness. Share this extensively thorough every social media. This bill should not be allowed to become an act.

– Vladimir Furtado, Goa

FATORDA FAST FORWARD

IT is very interesting to see Fatorda is moving Fast Forward with Faster Fene, a dynamic young upcoming leader in action. In just six months police station is opened with full complement of staff when many are still understaffed. The Maina Curtorim PS is still housed in Margao perhaps due to apathy of elected representative, who is devoting time to oppose coal and also link to Rachol-Shiroda will now be in cold storage for next five years for sure. In yesteryears there was saying “Indira is India” and now it is “Fatorda is Goa.” It will be educational/IT habitat, now housing District Administration Office/Hospital, etc, and Corporation for Greater Fatorda is not distant reality and soon will be converted as District Headquarters for

South Goa instead of Margao.

Two youngsters in just two months could arrange All India Dance Competition, while others have to literally slog and move place to place to make the event happen with little success. The Ravindra Bhavan was made available on platter with host of sponsorers who consider investment lucrative besides Department of Arts & Culture is always available to siphon the funds. It is very unfortunate MLAs-turned-Ministers pursue their narrow agenda, now headed by Fatorda, followed by Siolim and Porvorim, and that only CM has to think and work for the welfare of entire Goa. It is hoped they shed this mentality, come out of shell and devote and work for the interests of entire Goa.

– BVS Priolkar, Margao

GO SOLAR GOA!

TO allay fears about the usage of coal and its handling and transportation causing undue pollution and sufferings to the people of the port town of Vasco, it would be prudent for Goa government to switch over to solar power, since the state gets ample sunlight and since installation of photo-voltaic cell panels especially in the villages could reduce our dependence on coal which is used for coal-fired power plants from which we supposedly draw electrical energy. Several states in India have successfully adopted this source of energy. Also, since sunlight is free, the long term economics of solar power will in the long run prove beneficial to the state and be an alternative source of renewable energy to meet our electricity needs.

Coal is being phased out in almost all countries in the world as a polluting source of energy which emits greenhouse gases leading to global warming and subsequently climate change. Also since in Goa, the number of vehicles on the road running on petrol and diesel has reached the figure of 12,00,000 it would be prudent to while shifting to electrical cars in the long run, to balance the vehicular pollution at present by switching over to solar power which is a viable pollution-free option.

– Elvidio Miranda, Panaji

 

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