Pan India banks

I think Finance Minister, heads of banks,IBA and others who are asking for more and more banks have ignored the bitter experience banks faced when they opened numerous branches in order to implement Service Area Approach introduced in 1976 with a motto to make bank accessible in all villages having a population of 10000. Accelerated expansion of banking network took place from 76 to 96 and banks realized that many branches turned unviable and unsustainable. They converted many branches into satellite branches or shifted their location or finally closed the same. Banks are committing the same blunder by opting for unmanageable expansion of their network to increase the business. To add fuel to fire Finance Minister or RBI are advising for opening of more and more banks , local banks or PAN India banks.

What is the utility of bank in villages when they have got no money to park with? Villagers are starving and begging. There is no water, no electricity , no opportunity for getting job, no good school, no good hospital for medical care, no arrangement for proper security and no infrastructure in most of the villages , but there will a bank perhaps for delivery of various aids and subsidies to be directly delivered in the hands of villages through No Frill Accounts . Common men are crying for bread to eat and cloth to bear. Wherefrom will they bring money to bank with. They need money and not only no frill accounts for which RBI has been crying since long.

If Government feel that network of 65000 branches (including PSU banks, private banks, rural banks, cooperative banks, foreign banks) is not enough, they should convert all post offices numbering more than a lac in India into bank instead of opting for more and more local banks or pan India banks proposed by Finance Minister . Post officers are already in process of technological up gradation. When post offices in India become active on CBS platform , they will be able to start banking with comfort and they are available in all nook and corners of the country and they covers most of the villages in the country.

There is no need of opening new banks, there is rather need to consolidate the existing banks, post offices, on banking financial companies, insurance companies, share broking companies and financial institutions. There is urgent need to stop irregularities, mal practices, corruption and fraudulent activities prevalent in these institutes. . There is need to punish those companies who are swindling away money of poor people in villages by promising exorbitant interest. There is needed to make existing banks more active, efficient and honest. Numerous non banking finance companies are working in almost all towns to cheat money from common men and fly away in short span of time .RBI needs to stop such rape of common men.

In brief I can say that existing financial system is almost beyond the control of RBI and there is large scale cheating going on in the country. When media unearth any story of cheating by bank or NBCC, RBI or government of India comes into action that too for a day or two, institutes a committee to look into it and then forget. This is the painful story of RBI monitoring or that of government control.

This is why we frequently comes across incident of NBCC or cooperative bank or rural banks shutting their door or the head of such financial companies absconding from the town leaving behind thousands of investors weeping and crying