A Chain is Only as Strong as its Weakest Link: On PMC Bank Debacle

Punjab & Maharashtra Co-operative (PMC) Bank, has been all over the headlines as it forms the epicentre of a major financial calamity. It has been deceitfully dispensing loans to Housing Development & Infrastructure Ltd (HDIL), halting deposits of numerous customers. It is quintessentially a member of 26 Urban Co-operative Banks (UCBs) that were placed under restrictions by the RBI. A languishing consequence alludes that major operations like deposits’ fluctuation are stuck.

Co-operative banking institutions account for about 8% of deposits and 9% of advances and loans in India. Co-operative banks are still pertinent as they are answerable to first time borrowers, who are ostracised by public sector banks or private banks. Co-operative banks charge a burgeoned rate of interest on loans to compensate for the higher risk. Hence, they provide an incentive to depositors.

The board of directors of a co-operative bank is voted by the bank’s members. The selection procedure is usually staged by politicians who want to influence the direction of authority over a bank. While the state registrar of co-operative societies is responsible for overseeing the administration and audit of these banks, the apex bank controls their banking functions. Multi-state UCBs come under the vicinity of the central registrar of co-operative societies. This dual control has been labelled as the root cause of eyeballing of loopholes in UCBs. UCBs do not need the RBI’s approval to appoint their chief executive, unlike commercial banks.

UCBs return on assets and return on equity is negative. Days after the Union government scrapped Rs 500 and Rs 2,000 currency notes in November 2016, the RBI said DCCBs could not accept these notes, as commercial banks were allowed to do, apparently because the RBI dreaded laundering of unaccounted cash through these banks. While there is accord on the requirement for more stringent regulation of co-operative banks, there are some who advocate a different tactic to co-operative banks and strongly believe that UCBs should have more flexible norms as they are representative of the general public.

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Past makes present: Elon Musk 's anti union tweet

Who would have thought that a tweet made in 2018 will cause hassle in someone’s life in 2021. We are talking about none other than Mr. Elon Musk, CEO of Tesla, Inc. He needs no introduction but more than him, his tweets are famous. Elon Musk has been seen tweeting sharp and blunt statements very often but this time he faced serious repercussions as well. Swami Vivekananda rightly said that the present is determined by past actions. It all started in 2018 when Elon musk is his tweet, wrote: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.” This tweet came in the limelight in 2021 when National Labor Relations Board found it oppressive and threatening. As per NLRB the tweet by Mr. Elon Musk was unlawfully threatening the employees with the loss of stock options if they decided ...

Russia’s Melting Snow May Cost the World Economy 2 Billion Dollars

The impact of climate change on a vast permafrost area of Russia has become a principal apprehension for the country. This is primarily due to thawing of once permanently frozen ground which covers more than half of Russia. The liquefication of snow is putting buildings, pipelines and other infrastructure in peril. This problem needs to be addressed imperatively because the scale of damage will escalate every year. Rising temperatures are the epicentre of anxiety for mining, oil and gas companies. The permafrost area accounts for 15% of Russia’s oil and 80% of its gas operations. It is also home to miners including MMC Norilsk Nickel PJSC, the biggest refined nickel and palladium producer. Multiple new craters have been found in the gas-rich Yamal region, which is a risk to pipelines. By 2050, global warming may jeopardise about a fifth of structures and infrastructure across the permafrost area, costing about $84 billion. Residential real estate, worth $53 billion, might be als...

Changing Environment For Local Business In Sri Lanka; Government Initiates The Revolution

Local industries and businesses are the backbone of the economy of any country. Additionally, Sri Lankan Government defines a local company as one with a minimum ownership of 51% of a Sri Lankan. To help these companies grow, the Sri Lankan Finance Ministry has proclaimed a circular enlisting the priorities to the local companies. Moreover, this move from the government may bring some salient alterations in the condition of the local manufacturers. The government has also come with up steps that will augment the local industries across the different domains. These domains include IT sector, construction, etc. The circular, as issued by the government includes relevant documentation regarding sourcing of resources and products. Additionally, sources point towards the fact that the government is hoping to extend support to the domestic sector and help them grow. Besides, the major focus is on the three sectors- IT software and hardware, construction and furniture and allied products. Pos...

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