Monday, December 31, 2012

MY VIEWS IN TIMES OF INDIA ON BANKS CHARGING HIGH PRICES ON PRODUCTS


The Times Of India Story on 31.12.12: RBI cautions banks charging high prices on products. 

Comments of Milan K Sinha (Patna, India)
31 Dec, 2012 10:31 PM

"Reserve Bank deputy governor K C Chakrabarty has rightly cautioned the Banks against charging high and discriminatory prices on products. We all know that the Central Govt. and RBI had granted lots of autonomy and discretion after the onset of policy of liberalisation in Indian Economy to empower the Banks to take important decisions in order to implement customer friendly initiatives and give a natural boost to its overall business in an efficient and profitable manner. As a result, during the last two decades, the banking in the country effected many changes in its operational model with state of art technology as the major game changer. But, the core issues like pricing of both deposit as well as credit products together with various charges, hidden and un-hidden both, have not been or couldn't be addressed in a sincere and genuine manner to make the banking operations really inclusive & customer friendly. No doubt, the cost of operation in our banking is still reasonably high for multiple reasons, both controllable and non-controllable. If one goes through the expenditure items in profit & loss account of our banks, the areas of wasteful and avoidable expenses can very well be observed and hence can urgently be taken care of. The issue of NPA management has been a perennially serious concern area which has deteriorated further with more severity during the last few months in this fiscal. Consequently, the NIM (Net Interest Margin) is under increasing pressure in case of majority of banks in the country. These factors naturally have a definite bearing on the pricing of products. And on top of it, the discrimination in pricing is adding fuel to fire which must be stopped forthwith by initiating suitable measures by the regulator. In fact, the Central Govt. and RBI have enough room for addressing the grey areas in our banking system which is, otherwise too, urgently needed in order to improve the overall health of banking and also the economy of the country."

                                           Will meet again with Open MindAll the Best.

P.S: To view full story, pl. click on the link

* Do visit my site : http://www.milanksinha.com/

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