Tuesday, September 30, 2008

A message in the rumour

Things are falling apart again, the capitalist centre of America is unable to hold, to bail the financial firms out from the worst-ever crisis. The global financial terra firma is shaken, markets are in turmoil, the tremors are being felt everywhere in the world. How can the city of Hyderabad be left behind?

At 9.30 pm, I get a call from my friend, "you know something there is no money in ICICI Bank ATMs, people are queuing up like mad! running helter-skelter, if you have any money in your account , go and withdraw soon!" It was such an odd hour at night. I told him, "don't worry it could be a rumour and the ensuing bank holiday must be adding to the anxiety."

For a moment I wondered, what if...eventhough ICICI bank is rated almost on par with some nationalised banks in India...what if it really happens, for all you know banks can go bankrupt anytime especially if they've risen fast, the fall could be faster! Hey, but it can't be like quicksilver, I calmed myself, though I did have some money in my account. The global financial meltdown is sure to impact our banks, but not so soon, I comforted myself.

Next day, the newspaper reported that it was all a rumour. Perhaps yes or perhaps no! but a 'rumour' compounded by the irresponsible role played by media, especially the local TV channels. Naturally, it led to people panicking, running to various ATMs, not realizing that ATMs can hold only limited number of currency notes. In fact, someone told me, 'you can be very lucky if this bank really closes down, coz your housing and car loans are from the same bank!' I certainly wouldn't have liked that at any cost! I also heard that some people were finding ways to use up their money with their debit cards in anticipation of the worst scenario! How apprehensive one could get!

However, there was an underlying message in this turmoil. How volatile private banking could be, the necessity to maintain a balance between public and private sector banks. That could be one of ways of mitigating the risks involved in present day banking.

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