Economic Issues - Are we barking up the wrong tree?

We have the habit of barking up the wrong tree.We are habituated of blaming molested and not the molester.We blame police to not control the riots, but hardly the rioters.We blame the lawyers for delaying the justice, but not the judiciary.

So that's in our blood. Yes, we do bark up the wrong tree.

Consider this, If economic policies were bad for the banks, how come ICICI, HDFC Axis, or SBI flourished? How the customer loan rates went down? Home and Car loans between 8 to 9 percent and personal loan between 10 to 12 percent? Why the fiscal deficit is low and how is the depreciation of INR in check? Why the food inflation the lowest post independence?

Secondly, Why should a government be blamed for the financial stunts carried over by the ambitious business owners?

I believe, by reducing the number of months for being a loan turning NPA from 24 to 18 and then to just 3, RBI is regulating the banks. This step will definitely make the NPA figures rise, but weren't they already there. It is just because 24 and 18 months wait was not allowing them to pop up early. Neerav Modi, Mehul Choksi, The royal businessman and ex MP Vijay Mallya, all used these loopholes to create the mess. In New system they are getting caught. And they are getting caught early.

This is the therapeutic phase and a lot of filth will come out, as it came for PNB, PMC, ICICI and Axis. There will be financial institutions, which will feel the heat, if their conduct were not appropriate. And rightly so.

The customers and investors of PMC and Yes banks were already cheated, not by the RBI or current government, but by the management of these banks. RBI is just trying to safeguard whatever they can, for the end users.

In 2015, the RBI's found that Asset Quality Review report submitted by Yes Bank was flawed. The first instance of unearthing the wrong doings by the bank. Can be termed as cheating to the investors. The bad loans and NPAs were kept under the rug. Investors should have tighten their financials then. Clear case of wrongdoings by the promoters.

The imposed moratorium will safeguard the financially weaker customers first. Yes Bank is more likely to be bailed out by larger banks, mostly SBI, as happened earlier.

Between 2004 and 2006, Global Trust Bank, Ganesh Bank and United Western Bank were imposed with moratorium, later merged in different banks. UWB was merged in IDBI in 2006. Federal Bank acquired Ganesha Bank, and global trust Bank was taken over by Oriental Bank of commerce. Bank of Rajasthan was merged into ICICI in 2010.

Banks may fail, due to various reasons. But if the banks are failing due to the political nexus, financial frauds, we must support the policies of RBI, which are now unearthing them instead of pushing them under the rug.

If banks are failing due to government's policies, we can definitely blame the government and fight for correcting it.

However, it seems to be the case of unearthing the filth which was piling up under the rugs and when the rug is getting cleaned, we are blaming the cleaning process. Whereas we should be supportive to the cleaning steps, for healthier financial setups.

By blaming economic policies on these issues, we definitely are barking up the wrong tree.