The commies did a very smart thing. They convinced Nehru that he should not interfere in the education system, so we were brought up on the commie narrative.

So we were not taught about the great Hindu kingdoms. Ask any child and they will tell you that the Muslims ruled over us for 800 years and the Brits for over 200 years. No mention about the Cholas, or even the Guptas and the Mauryas. No mention that it is the ONLY country in the world which has kept many religions alive. We as a country benefited by allowing other religions to thrive here – Parsis for an example. Jews, found a refuge here too.

Now see the narrative that a kid is told in the US. It is alright to eat pigs, but dogs are pets. In China children are told that it is fine to eat pigs and dogs. So an American is horrified seeing the Chinese eat dogs. A Hindu is horrified that people can eat cows – an animal which many of them worship. Just the narrative.

Now for decades you have been told that bank deposits are safe. Not because your banker lends rationally, but because your Government will protect your deposit. So you are indifferent whether you keep the money in a loss making IOB or a profitable SBI. Just the narrative. Mr. Modi is trying to change the narrative a little. In case the banks are removed from the ‘sovereign cover’ will your money be safe? I doubt. Will it create a panic among deposit holders? Yes. People will leave an IOB and go to SBI – this is EXACTLY how it would have worked if all the banks were not owned by one Lord and Master. It is high time we accepted risk in our portfolios.

People are asking me where should one keep one’s money if banks are no longer safe. Let me just add – banks were NEVER safe by design. It is just an implicit understanding that the biggest shareholder – President of India – will bail out all PSU banks. If the Gov withdraws this – either by behavior or by a written diktat, there will be a run on the banks -weak and private sector banks to start with! Co-operative banks are RISKY, and the gov does not protect them, however people see the word ‘bank’ and have let them grow. At least in Maharashtra, they are big.

So if our country should go, we need to change the narrative. Try this experiment today – say nice things to the people around you. Tell your kids, I love you, but I don’t like this action of yours.

Change the thought, change the narrative, and see the positive results.

Once you are convinced that it happens at the ‘self’ level, raise it to family, office, friends and the country levels!

 

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  1. “No mention about the Cholas, or even the Guptas and the Mauryas. No mention that it is the ONLY country in the world which has kept many religions alive. We as a country benefited by allowing other religions to thrive here – Parsis for an example. Jews, found a refuge here too.”

    Please refer the history text books before making a statement.

  2. Then disband the RBI! Or atleast start by removing the power of RBI to set ‘Repo’ rates! Remove ability of RBI to give so called ‘stability’ by providing liquidity to any bank that needs it. Let each bank manage its own liquidity and provide its own ‘trust’ and ‘stability’. Don’t create an interbank system and have key players run the risk of taking down the system. Then ‘privatize’ all banks, reversing Indira’s Nationalization. No govt has the balls to do this, not even this one.
    Mr. Modi and this govt is only taking half hearted measures, because they know that the biggest borrower and the biggest NPA generator is the govt itself. All govt borrowings are NPA, they are never repaid, just legally rolled over.
    We, Indian Citizens, need to realize this with no ambiguity: When we put our money in FD, 23% of that is given to govt. Yes, by law, govt expropriates our FD from these very banks. No matter whether its IOB or SBI, the SLR requirement ensures that. Because of this, it really doesn’t matter which bank you put your FD, you are depositing your money with the BANKING SYSTEM.
    Can India go back to the Pre-Nationalization system? Sure we can, but are we all ready for the consequences of the same, including the govt? No, we’re not ready…no nation with its sovereign currency and a functional central bank is ready. Ergo, its not going to happen.

  3. Subra Sir,
    Here’s the PDF of the Class 7 history chapter from NCERT website. It talks about the Cholas in detail and refers to the Gupta dynasty taught in Class 6.
    http://ncert.nic.in/ncerts/l/gess102.pdf

    We are looking up to elders like you to keep the peace in these polarizing times for our country. This incorrect statement of yours in an article about fixed deposits is adding fuel to the fire whether you realize it or not.

    I have great respect for your astute financial observations. But I have to respectfully disagree with this incorrect “narrative”.

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