India in the scheme of things isn’t isolated and thus, understandably affected. Our economy isn't in the best of shapes and a continued deceleration due to the outbreak of coronavirus may further push it into an abyss. Many economists believe that the world shall witness a global depression if the respective governments don't scramble at the earliest and put the pieces together. In a recent interview, the IMF Chief suggested that the situation is feared to be more severe than 2007-09 sub-prime crisis.
In the context of the battered Indian economy, the public sector banks play a pivotal role of forbearance. It is only through banks that the masses can be reached and the crisis can be arrested.
While we have heard of proposals to defer loan repayments and loan waivers in times of crisis, why cannot we move towards negative interest rates like Japan?
This may help us revive our economy and steer the country out of this mess. Can this be a heroic pull off? A reference point in turnaround management?
Let's first understand the meaning of negative interest rates. Consider you paying a fee for banks to hold on to your cash deposits and banks paying you a fee to opt for loans.
Seems weird! One would perhaps scratch his / her chin and make an attempt to comprehend it, which for many is an unfathomable concept! The underlying idea is to incentivize loaning & spending rather than saving and consuming.
The next logical question is why would banks do it?
In favor of the tide...
The time is most opportune for the banks to opt for negative interest rates because there could be an economic depression and deflation in the near foreseeable future. Now there could be an argument that negative interest rates and low inflation go hand in hand so how does India fit in?
Bu hikaye BANKING FINANCE dergisinin June 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye BANKING FINANCE dergisinin June 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
ICICI Bank partners with PhonePe to offer instant credit on UPI
ICICI Bank announced that it has partnered with PhonePe to offer instant credit on UPI to its pre-approved customers on the app of the digital payments company.
Indiagold Eyes Major Expansion in India's Gold Loan Market
Indiagold, a prominent fintech company specialising in gold loans, is set to disrupt the gold loan industry with its ambitious expansion plans and innovative product offerings.
RBI CIRCULAR
Facilitating accessibility to digital payment systems for Persons with Disabilities Guidelines
Legal News
The Supreme Court announced the launch of a new webpage on its official website providing summaries of landmark judgments.
The Role and Impact of the Insolvency and Bankruptcy Code (IBC) in NPA Recovery
Indian banks, especially grappling with the mounting challenge of Non-Performing Assets (NPAs) within Scheduled Commercial Banks (SCBs), are experiencing a significant downturn in their capacity for credit recycling, resulting in reduced business opportunities and declining profits. However, various factors contributing to the severity of NPA problem are including macro-economic, political, and internal factors, emphasizing the complexity of the issue. With this background, the present study puts an effort to look at the role of the Insolvency and Bankruptcy Code (IBC) in NPA recovery and also showcasing its significance in resolving insolvency and maximizing creditor recovery.
Big Data in Banking: Analysing its Role, Advantages and Challenges
Globally Inflation started rising post April 2021 and went above the target range set by most of the Central Banks. It had remained low and dormant for a substantial duration since the global financial crisis. CPI inflation in developed countries such as US, UK and Euro zone, began to exceed their traditional target of 2% and continue to stay at these elevated levels till recent time.
Is SIP Always the Best Option? A Look into Lump-Sum vs SIP During Volatile Markets
SIP is a method of investing a fixed amount at regular intervals, typically monthly, into a mutual fund. It allows investors to buy more units when prices are low and fewer when prices are high, a process known as rupee cost averaging.
Strategies for Mutual Fund Retail Investors during market downturns
When stock markets experience a decline, mutual fund investors often face a sense of insecurity and apprehension. The volatility can lead to impulsive decisions, which, rather than securing financial health, may impair long-term investment objectives.
The Rise of Green Marketing: Driving Sustainable Change
Green marketing refers to the practice of promoting products or services that are environmentally friendly or sustainable. It involves incorporating eco-friendly elements into various aspects of marketing strategies, including product development, packaging, advertising, and distribution.
Fraud Risk Management In Banking
Fraud risk management is a fundamental aspect of overall Risk Management within the banking sector. In India, banks adhere strictly to guidelines set forth by the Reserve Bank of India (RBI) to prevent, detect, and promptly report fraudulent activities.
