Sudhansu R Das
The majority of adult Indians do not have adequate knowledge of banking activities. They only know that banks keep the deposit, give loan and pay them interest on the deposit. They don’t want to know what banks do with their deposits and how banks safeguard the depositors’ interest. Depositor being a stakeholder, should know banks’ investment portfolio, loans given to different sectors, overall governance of banks, internal audit mechanism and the contribution of the board of directors etc. Though banks publish their balance sheet in newspapers, the majority of depositors find it difficult to make out whether the banks are performing well and are capable of safeguarding their deposits.
The Draft Education Policy should necessarily include banking as a subject in schools. This will help groom potential borrowers and entrepreneurs for banking business. Today the gross Non-Performing Assets of public sector banks shows at an alarming 9.3% which is far above the tolerable limit of 4%. The frauds in banks have increased from Rs 41,167.03 crore in 2017-18 to Rs 71,500 crore in 2018-19. The total losses of PSBs show at ?57,835.23 crore in 2018-19. Politicians instead of declaring loan waivers should create a conducive environment so that the borrowers could earn a surplus from their enterprise and happily return the bank loan. The concept of a healthy credit cycle should be taught to children so that they will not become wilful defaulters.
The banking sector is the backbone of the Indian financial sector. Despite NPA and frauds the Public Sector Banks still win the trust of the depositors. The PSBs collect more than 70% of the total deposit in the entire banking sector. It is necessary for schools to teach children how to protect their money amid digital transactions as internet fraud happens in every five minutes.
If a child learns the importance of credit cycle, repayment ethics and about the purpose of bank credit he would become a responsible borrower and choose the right banking products. If children at school learn about the dairy, poultry, fishery, horticulture schemes, Self Help Group formation and about the financial inclusion, he could easily establish micro, medium and big enterprises in his village with bank loans. Proper utilization of credit always serves the social good which is enshrined in the Banking Regulation Act 1949.
The child should learn what is KYC documents and other formalities for bank loans. The government’s various subsidy benefits attached to loans should be known to children at the school level. If a child comes to know various loan products in banks and understands the potential of various economic sectors, he could start his enterprise early. A 12th pass student should be in a position to convert the available potential in his village into a business proposition.
India has witnessed an unemployment rate reaching a 45 year high at 6.1% during 2017-18 despite steady economic growth. India also aims to become a five trillion dollar economy by 2024. The growth should be accompanied by human resources development. The union government should diversify the employment potential with a multi-sector development approach instead of focussing on a few sectors which are integrated with the global economy.
India has a wide range of economic activities compared to many developed nations. A child in a village school should learn how to convert his father’s fishing profession into a fish processing plant. The son of a coconut plucker should produce various coconut by products. Similarly a milk man’s child should learn to make a booming business out of the sale of cow ghee and other cow products which have a huge domestic and export demand. A young weavers should learn internet marketing to escape from the grip of the money lenders. Schools should play an important role in making children aware of the potential available in their own village and instill love and respect for the family profession. The nation has lost much rare skill in the past decades. Here the policy maker and planners should go from door to door in villages and small towns to get a mirror view of the hidden potential of different regions.
The weavers of Putapakka village in Nalgonda district makes double ikat designs on silk sarees. But the number of weavers making double ikat is fast disappearing though double ikat is a popular export item. More than 90 % of weavers in Putapakka do not take bank loans because they can’t market their products on their own. The majority of the weavers work for traders and master weavers on a wage basis. If schools teach children how to use bank credit for establishing their own entrepreneurship it would encourage the young generation to remain in the weaving profession. The main objective of economic growth should create more self-employment instead of creating a cheap global labor force.
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