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I was watching one show TMKUC and in that, they were talking about the investment. One statement I discovered during the show was “If you want to do business and want to take risk, use Bank's Money, do not use personal money”.
I came across such situations where this statement looks true in nature. The FI market have lot of examples which proof the above statement.
If
someone is taking money from Bank for his expenses/ investments, Business
expansion, working capital loan etc they are using ultimately Investor’s money
(Saver’s money). In traditional way, the Saver can save money using the Time
deposits (Saving account, Fixed deposits, Recurring deposits etc.). this
instrument is very much attractive and considered Safer in nature. As Saver’s
believes that keeping money with Financial Institutions like BANK. The banking
system have different players like the followings,
1.
Patpedhi (Local FI who provide the Deposit and Lending services)
2.
Co-operative Bank
3.
Public Sector Bank
4.
Private sector Bank
5.
Foreign Bank
6.
Central Bank
All these
institutions accept the Deposits and provide Lending services. Some of the FI
are regulated and governed by the central bank of the country. These
institutions provide interest rates from as low as 4% to as high as 9%. These
institutions operated based on the trust they have created in the Minds of the
consumers and in the market they belong.
In recent
times, it was observed that, Banks are getting failed to their regular
business. Means they are unable to give back the Depositor’s money when
demanded by the Saver’s. This happens because Bank are not able to recover the
money from its borrowers. Also, it was found that the Saver’s are losing his or
her corpus due to this as Banks can not able to fulfill the liquidity
requirements.
My biggest worry is who’s interest should be first taken into consideration, Saver’s or Borrowers’ by all these FI. Who Comes First.
Can we have mechanism where the Saver’s can be able to identify where is his money and with whom it is going to be.
Can we have mechanism where Saver’s can able to approve or give consent to the FI, whom to loan the money which is deposited by the Saver’s in the FI.
Retail customer can not able to know where his funds/ money is getting utilized. HNI or Big institutions do have such option to choose where to loan money or not using FI platform or system. Maybe they don't know as well sometimes.
Risk is involved in all part of the Investments and borrowings. Only possible way with the investor is to minimize the risk using DIVERSIFICATION.
catch you
in next volume..
