Being the regulator of banks, it is the sacred duty of the Reserve Bank of India (RBI) to take measures that lead to the protection of depositors’ money, economist Dr Ashwani Mahajan told Sputnik India on Tuesday.
The statement came in light of India's regulator and RBI chief Shaktikanta Das reportedly saying that protecting depositors' money was a sacred duty for a banker and probably more important than worshipping at a religious place.
Das, who was ranked as the top central banker globally by US-based Global magazine, stated that the task is important since the whole banking system operates on deposits accumulated from small savers, the middle class, and retirees.
He also pointed out “excessive dominance” by one or two board members even in “big commercial banks” and urged lenders to correct this.
'First Principle of Banking'
Talking to Sputnik India, Ashwani Mahajan, who is also the co-convenor of Swadesh Jagran Manch (SJM), an economic advocacy group linked to Rashtriya Swayamsevak Sangh (RSS), said: “It’s the duty of banking to safeguard the money deposited with a sense of faith. Though I don’t see it’s related to religion, I feel the RBI Governor intended to say it's every banker’s 'sacred duty'".
The RSS is the parent organisation of India’s federally ruling Bharatiya Janata Party (BJP).
Mahajan said the banker’s duty is not to splurge other people’s deposits. “If people deposited their money with great trust, it becomes your duty to protect it. I feel it’s a natural statement from the RBI chief. It’s the first principle of banking”.
With the RBI undertaking measures in the past and saving Yes Bank and some cooperative banks' depositors' money, Mahajan elaborated: “The banker’s duty is there. But being a regulator of the bank, this is also the sacred duty of the RBI to take measures leading to protection of the depositors’ money".
RBI’s Silence Under Congress-Led UPA Government
Without naming anyone, Mahajan alleged that during the Congress-led United Progressive Alliance government (2004-2014), the RBI remained a mute spectator of public money being looted. "Because while looking at the data I found that the net outstanding loans of the banks increased by approximately nine times”.
Mahajan said that he recently stated it's the duty of the RBI to check why there has been a disproportionate increase in outstanding loans.
"You know, the size of the economy might have stayed doubled. But if you see the outstanding loans increasing by 9 times that means there must have been something going wrong”, he said while explaining why, like banks, it is the sacred duty of the RBI to protect the interest of depositors.