Opening up banking sector will endanger economy: expert

October 6th, 2008 - 10:40 pm ICT by IANS  

Chennai, Oct 6 (IANS) Since the savings rate in the West is too low, the overseas banks would like to control the savings of Indian investors once the country’s banking sector is opened up, a leading economic commentator said here Monday. “Opening up the banking sector and allowing full currency convertibility would result in importing all ills of the American banking systems,” said S. Gurumurthy, a practicing chartered accountant and a columnist.

“The savings rate in the US and Europe is low. The overseas banks would like to control the savings of the Indian people,” he added, while addressing a seminar, jointly organised by the Consumers Association of India and Indian Banks’ Association.

An economy that is built on encouraging spending, credit and individualism at the cost of family values is bound to face problems, he said referring to the US economy.

K. Srinivasan of Prime Point Foundation, a non-profit public trust, said: “People have trust in the government-owned banks.”

Referring to the rebranding exercise undertaken by some public sector banks, he said: “The need of the hour is repositioning the banks and training their employees. Rebranding per se without changing the basic structure will be like trying to make an old women look young with trendy attire.”

Listing out the rights and duties of customers and banks, Reserve Bank of India Deputy Governor Usha Thorat cautioned account holders against signing any paper without reading.

With rising complaints about credit cards and recovery agents, the central bank has put down strict procedures for banks to comply with, she added.

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