If you thought that only banks in the US were going bust in the economic meltdown, think again. As per a business daily, when banks in US were falling like ninepins, some cooperative banks in India were not far behind. In fact, for every five banks going bust in the US, there were two in India that were going belly-up. It may be noted that as many as 19 Indian co-operative banks collapsed in FY09, as against 44 American entities. The newspaper report also states that the RBI’s credit insurance arm had to pay over Rs 1.4 bn to depositors to cover the liabilities of these 19 entities. Under the insurance norms of the Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the RBI, a maximum of Rs 1 lakh is paid to a depositor in case his bank becomes insolvent.
Look at government inefficiency, food prices have galloped at an alarming rate over the last few months. Some blame it on the poor monsoons. Some blame it on hoarding by greedy middlemen. In my opinion, the government unknowingly itself is a massive hoarder. As per a report in a financial daily, the stock of rice and wheat in government granaries is way above the minimum requirement. Sadly, much of this excess stock is stored in the open. It either rots or feeds pests. In my view, this is a national shame. We cannot get the basics right in such a crucial area when food prices are spiraling out of control and millions of Indians still go hungry. Such stocks should be stored properly and released in small lots to stabilise prices.
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