@Neha_Raghuraman
I’ll answer your question in two parts, first on the rational argument of banking regulation and then to your politically heavily charged statement “Almost feels like we are living in a fascist regime.”
Almost every financial crisis in the history of economies has been because of financial sector malpractices.
The 2008 crisis was totally because of the inability of the central bank & SEC to regulate Collateralized debt obligations (CDOs), limits on lending norms, etc. The funny thing was that secretary of US treasury was himself CEO of Goldman Sachs. No wonder GS was profitable even during the crisis. This is exactly the type of cronyism that a regulator is supposed to prevent.
The Indian NPA problem which could very well would have turned into a full blown crisis if not for the asset quality review (ASQ) done by RBI.
Now, some recent examples of private banks issues, ICICI Bank Chanda Kochaar’s conflict of interest, Shikha sharma of axis bank and now Rana Kapoor of Yes bank.
They all are really good bankers and have taken their respective banks to new heights but historically all banking problems have arisen when the top executives overstayed their normal terms. They keep on putting their bank weaknesses under the rug and the real mandate of RBI is exactly to not let this happen, so here is what RBI found out:
—- “YES bank had reported gross NPAs of Rs 2,019 crore for 2016-17. But as assessed by the RBI, the gross NPAs should have been Rs 8,373 crore for that year; this meant a nearly 5 percentage point increase in its gross NPA ratio for 2016-17 than was reported.”
—- https://economictimes.indiatimes.com/industry/banking/finance/banking/yes-bank-under-reported-npas-by-over-rs-4000-crore-in-fy16/articleshow/58650307.cms
In my opinion it was a good decision, there were indications that all is not right in YES Bank.
Now answer to the political statement on “fascist regime”.
Please stop getting influenced by this constant propaganda, especially if you are into a rational field like business and finance. India is not going to turn into a fascist Regime. Elections are coming these narratives are all part of it.
Educated people should first read about the history of India, history of fascism and how Communist and capitalist order came into world before jumping directly on such baseless conclusions.
. So True
