It is mystifying how the NSE, a near-monopoly, gets protection, as the February 24 episode shows, when it is competition and accountability that should be the regulatory objective, says Debashis Basu.
The brand new bankruptcy process is being brazenly gamed by those with connections and money. The touts and fixers of the previous regime have been replaced by a new set close to this one, observes Debashis Basu.
Human memory about policy issues is short. That alone can explain why many are deliriously happy with his latest slogans and ignore seven years of poor 'doing business' climate, taxtortion, extortionate oil prices, and high dependence on babus and the big State that has kept the enterprise system stifled, observes Debashis Basu.
While law-abiding customers are harassed for KYC and have to comply with endless paperwork even to open and close accounts, DHFL could easily open nearly 260,000 fake home-loan accounts, reveals Debashis Basu.
The RBI, which has no interest or mechanism to get feedback from bank customers, is unaware of this. If made aware, it remains silent, proving that it has no problem in allowing lenders to short-change its customers, says Debashis Basu.
It is intriguing that the CBI has shown little interest in the most scandalous and biggest collective investment scheme ever, from the Sahara group, asserts Debashis Basu.
'If the epidemic is sharply contained in a month or two, we have a huge buying opportunity. 'If not, we are staring at a serious economic crisis, the contours of which we are totally unaware of,' warns Debashis Basu.
And if there are so many opportunities, why haven't they invested in them, asks Debashis Basu.
'Under this government, tax laws have become more draconian, and the government itself is setting stiff, unrealistic targets for tax officials, who have got more powers to harass us,' points out Debashis Basu.
Bad loans of PSBs are at Rs 20 trillion. Most of it is, I sense, due to corruption and behest lending. Nobody pays a price for this charade. Not the promoters, the bankers, RBI officials, finance ministry bureaucrats or politicians, points out Debashis Basu.
Those behind recapitalisation are neither aware nor do they care. After all, they have no skin in this game. And the Lok Sabha elections are round the corner. That's what they care about, points out Debashis Basu.
'The belief that FDI will shift from China appears to be a strategy of politicians to keep the media busy, chasing irrelevant news to ward off pressure and questions about the government's plans to deal with COVID,' observes Debashis Basu.
'We can only hope that the government has finally 'got it' and will stay focused on improving productivity, demand, and governance,' says Debashis Basu.
'MFs acted as reckless lenders and not as prudent investors.' 'Clearly, how debt funds are being run is a systemic issue,' warns Debashis Basu.
'The deeper problem is big government -- a giant monster with a giant appetite, which requires it to put more and more pressure on tax officials to extort. 'And the monster is getting bigger by the day. But then, Mr Modi too knows this,' says Debashis Basu.
It is best to invest long-term surplus in stocks or equity mutual funds.
'The recalculated ranking showed India should have had a higher ranking earlier (113 in 2012 instead of 132) and lower ranking later (114 in 2018 instead of 100).' 'This would mean that there has been no change in India's climate of doing business across two regimes.' 'This is exactly consistent with the reality on the ground,' observes Debashis Basu.
'The assumed linear correlation between forced lower yields, higher bank borrowing from the RBI, higher lending, and higher growth involves leaps of faith, each a step on the quicksand of false beliefs,' warns Debashis Basu.
Debashis Basu lists various reasons why laundering through the stock market thrives.
'When the lockdown grounded a billion people, nothing had been planned well: Testing, masks, face shields, protective gear, medical equipment, contact tracing ... nothing.' 'Before COVID, if you didn't know that the state had neither the money, nor the intent, nor the capacity to govern wisely and humanely, you were simply blind.' 'After COVID, if we continue to look to the State, look forward to a financial package or ask "What is the government doing" when faced with a calamity, the joke is on us, says Debashis Basu.
'Put the assets of PMC Bank and the personal assets of the HDIL promoters and head of PMC Bank in an escrow account and ring-fence it from the ad hoc action of the revenue departments and creditors,' recommends Debashis Basu.
'It is strange a government that is bold and coercive has meekly chosen to do more of what has repeatedly failed to work in the past.' 'And sadly, rating agencies, the business community, fund managers, and analysts, who know this, have chosen to act as compulsive cheerleaders,' says Debashis Basu.
Banks are cheating customers with rates that are unfairly high, discriminatory, and opaque, denying legitimate savings to borrowers, while the RBI has been looking the other way, says Debashis Basu.
'No Budget has so far has addressed the issue of the government's abysmal productivity of capital spending, improving which will be the big game changer. 'But, the government's tight lock on businesses, banks, education, and even essential services like transportation and large parts of infrastructure and healthcare is destroying capital year after year,' points out Debashis Basu.
It is clear as daylight to anyone that a charge or a cost to simply reduce interest on a floating rate loan is extortion, but this is exactly what the RBI has officially sanctioned, says Debashis Basu.
'Why are FMPs used as a vehicle for promoter funding against listed shares?' asks Debashis Basu.
Scams happen with high regularity because the price of getting caught is insignificant. Aggrieved investors run from the police to already clogged courts to find redress for issues for which financial regulators have been specifically set up. For over 3,750 years we have known what to do, but we don't do it, observes Debashis Basu.
Multiple organisations of different kinds with overlapping goals would be a dream situation for those who believe in competition and innovation.
Digital services work best when the seller designs a system where default options are designed to help the buyer, says Debashis Basu.
The Securities and Exchange Board of India does not seem to have understood the enormity of what funds have been up to. If Sebi does not crack down on mutual funds using cooked-up credit ratings to hide behind promoter funding, this is bound to grow into a systemic menace, says Debashis Basu.But MFs decided to become lenders without the legal backing to secure themselves, or the skillset to assess lending risk. If Sebi does not crack down on mutual funds using cooked-up credit ratings to hide behind promoter funding, this is bound to grow into a systemic menace, says Debashis Basu.
Consumers will thank the Modi government for this simple yet revolutionary move, which is long overdue, says Debashis Basu.
The government has provided no official explanation behind the note ban that is backed by hard data, says Debashis Basu.
What was the RBI doing, what was the PNB top management doing, what were the auditors doing, asks Debashis Basu.
To say capital gains from stocks are effortless shows little understanding of the treacherous investing terrain, says Debashis Basu.
While the PM sees zero tax on long-term capital gains and dividend income as unfair since the beneficiaries are not poor, he is silent on the fact that rich farmers too don't pay taxes, since farm income is tax-free, a loophole exploited by many netas and babus, says Debashis Basu.
India borrows ideas that we don't need, like the FRDI Bill, and ignores the ones we need, like rewarding whistleblowers such as the ones who want to save Bombay Mercantile Bank, says Debashis Basu.
Why do we need a cure here for peculiarly Western diseases when we don't have those diseases, and which the West itself is not trying to cure, asks Debashis Basu.
The average bank customer does not know about the Customer Charter because it was designed - under Mr Rajan's regime - to be a lame duck initiative from the start: violating the charter has no consequences, points out, Debashis Basu.
The successful implementation of the new Act will depend on a much bigger involvement of the state through a huge new superstructure of registration, certification and supervision
For the past 10 years or more, the RBI has been turning down dozens of applications under the RTI Act that sought disclosing the list of wilful defaulters and the RBI's inspection reports. In fact, it is the only organisation that has a granular and complete view of the heist that has been going on for 25 years at least. But it has escaped any blame for the multiple rounds of bankruptcy and massive periodic recapitalisation of public sector banks caused by bad loans. In fact, they don't want anyone to know how incompetent and collusive they have been in handling bad loans, says Debashis Basu.
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