From our Readers: Sound analysis of problems and solution to the problems of the banking system

Dear Editor

I am writing in response to the article entitled `Solution to the Problems of the Banking System’ dated 14/09/2020 and carried on the web version of MEL.  It is an important piece of writing and goes a long way towards educating the working class and the rank and file of the CGPI.  The issue of losses and profits of banks and so-called non-performing assets and efficiency is an issue around which a great deal of confusion is sown in the public mind.  Thus, to understand this topic from a basic point of view and from the nuts and bolts point of view will empower the working class to understand how the banking sector and finance sector work and especially so under the capitalist orientation of society, economy and policies.

To achieve these ends, the article explains the following points in great detail, at a time when the problems in the sector are worsening:

  • that the people are being made to bear the burden of capitalist loan defaults, and that despite many waivers and transfer of funds from the central budget, the problem of bad loans continues,
  • and very importantly the problems afflict not just public, but private banks as well, as evidenced in the cases of ICICI and IL&FS,
  • that there are problems with urban co-op banks,
  • that the SBI had to bail out Yes Bank,
  • that these problems are not confined to India, but are prevalent in private American banks,
  • that the origin of the problems is capitalism at its present stage, where looting is the way in which monopoly capitalism works,
  • that the issue is not the ownership of banks, but their orientation, in so far as the capitalist class calls all the shots,
  • that solutions can come only when the working class is in charge of decisions, and a people centred orientation replaces a profit centred one.

The article also carries a box item on the reorientation of banking in the USSR which is also very educative.  Thus, a model already exists for mankind to learn from which can be a template for the future.

In conclusion, I am writing to thank you for carrying this fine educational piece and urge all members of the working class to learn from this incisive and analytical piece.  Let us be inspired to work towards a realization of such a state of affairs as described herein.



A. Narayan


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